Nearly everyone knows by now that “The Scream” — Edvard Munch’s iconic doodle of modern angst — broke auction records earlier this month when it sold for a few dollars shy of $120 million. In the weeks since, I’ve been thinking more and more about that sale and what it means.

I should confess right up front that I like both “The Scream” and the Norwegian artist from whose tortured mind it sprang more than a century ago. It’s probably not Munch’s greatest work. (That honor could go to “Jealousy” or “The Storm” or “Evening on Karl Johan Street” or any of a half-dozen others.) It’s not even a finely executed work of art by any standard. But who can forget it?

Still, $120 million represents a pretty hefty pile of American cabbage even for an unforgettable work of art, especially during a borderline depression. What else can you buy for $120 million these days? How about 120 vintage mansions at a million dollars a pop… or 3000 years of tuition at an elite American university… or 200,000 42″ flat-screen TVs… or a million hours of psychotherapy… or 10 million medium pizzas, each with two toppings of your choice… or (if you’re really conscientious) 60 million meals for poor people? You get the point.

The kicker is that the $120 million Scream wasn’t even the original that so many of us remember so vividly from our art history classes. In fact, it’s not even a painting. Munch created four versions of his most famous work, one of which was a crudely scrawled pastel imitation of the tempera original (which was pretty crude-looking to begin with). This pastel knock-off is the version that fetched the record sum at Sotheby’s earlier this month. (For that matter, the world’s priciest painting of all time, sold to the Persian Gulf mini-nation of Qatar last year for around $250 million, was simply one of five versions of Cezanne’s “Card Players.”)

Why would otherwise sane people pay a literal fortune for a second-rate copy of “The Scream”? It’s certainly not for the beauty of the image, the quality of the craftsmanship or the need to contemplate a profound expression of the human spirit (you could open an art book for the same experience). It’s not even for the chance to display such a famous image in your home and be the envy of your friends. Nobody would be reckless enough to leave a $120 million investment on the wall where burglars could snatch it, fire could consume it, or the cleaning lady could spray it with Endust.

So why would they buy it? For the bragging rights. For the investment value. Because they can.

For better or worse, the business of serious art collecting has always been the province of the economic elite. Why for better? Because only the elite can afford to lavish such extravagant sums on our struggling artists (especially after those artists are safely dead). From the Medicis to Henry Clay Frick to the faceless Japanese, Arab and American industrialists who keep smashing each other’s bidding records today, the super-rich have essentially run the art business since the dawn of the Renaissance. The more munificent plutocratic benefactors endow great museums or open their collections to the public, a favor for which the public should be decently grateful. By contrast, workers’ societies tend to favor public murals and propaganda posters.

Still, the incursion of today’s überwealth into the art world has produced some strange and unsettling trends…

Sticker shock. Of the 40 most expensive paintings of all time, all 40 were sold since 1987 — fittingly enough, as the Nouveau Gilded Age was taking shape under the smiling eyes of Ronald Reagan. And yes, the prices have been adjusted for inflation. The highest inflation-adjusted price previously paid for a work of art was $35 million for Leonardo da Vinci’s portrait of Ginevra de’ Benci back in 1967. (Not on the “top 40” list, as you probably surmised.)

Would a private owner have the right to destroy a beloved masterpiece like van Gogh’s “Portrait of Dr. Gachet”?

The disappearance of great art from public view. Yes, we can still pay our respects to the Mona Lisa and thousands of other great works in museums around the globe. But the tendency now is for mega-rich buyers to squirrel away their prizes and effectively make them vanish. Case in point: Back in 1990, Japanese paper manufacturing tycoon Ryoei Saito bought van Gogh’s beloved “Portrait of Dr. Gachet” for the then-record sum of $82.5 million ($146.5 million in 2012 dollars). The elderly Saito loved the painting so much that he expressed a desire to have it cremated with him when he shuffled off this mortal coil. Though the painting survived Saito’s demise in 1996, its current whereabouts are unknown.

Saito’s recklessly whimsical desire raises a disturbing question: does the owner of a world-class work of art have the right to destroy it, the way a home buyer can tear down a historic house? Can he paint a purple mustache on it or cut it down to a more compact size if that’s what he wants? It’s his private property, after all. Entrusting great art to private collectors entails a great deal of trust. Maybe we need to designate the finest works as world-heritage landmarks, sacred and inviolable.

A bias toward trendy, overhyped modern artists. Yes, painters of genius like Cezanne, Monet and van Gogh have fetched top dollar; that much is fitting and proper. I’ll even give the clever, overrated Picasso a pass as a groundbreaker of consequence. (He accounts for 10 of the top 40 priciest paintings.) But would you have guessed that the #2 and #3 spots belong to Jackson Pollock and Willem de Kooning? That’s right: in 2006, show-biz potentate David Geffen managed to unload a pair of their inscrutable daubings for $140 million and $137.5 million, respectively. Other “top 40” artists include Francis Bacon, Jasper Johns, Mark Rothko and, of course, that ubiquitous poseur Andy Warhol. (His “Eight Elvises” sold for $100 million in 2008.)

The irrelevance of scarcity and merit. Are the Pollocks, de Koonings and Warhols of the art world really worth so much more than Leonardo? Of course not. And Leonardo has the advantage of scarcity on his side: his output includes only 15 indisputable paintings, some of which were abandoned in the early stages, while others (like The Last Supper) happen to be attached to walls. So why the outrageous sums for Leonardo’s latter-day inferiors? Demand, for one. The overpriced contemporary artists are sexier than Leonardo (in the loosest sense of the word; Warhol wasn’t exactly Don Juan). They’re sexy in the sense that they emit sparks of danger and in-your-face irreverence. And of course, sex appeal routinely outsells nobility or beauty in today’s free market.

The artificial inflation of reputations. A critical issue, and one that partly explains the absence of so many Old Masters from the “top 40” list. Modern artists, like Hollywood celebrities and professional athletes, benefit from a vast, pervasive and free publicity machine that keeps their names in the public eye and inflates their value. When Angelina Jolie’s pillow-lipped face appears on half the magazine covers we see at the supermarket checkout counter, we assume that she’s worth something. No matter that we can’t remember more than one or two of her actual performances; the media continually tell us that she’s a commodity.

Would you pay $140 million for this painting? Someone did. It’s Jackson Pollock’s “No. 5, 1948.”

The same law holds true for modern artists. They generally don’t make the cover of People magazine, but their names achieve a similar currency within the smaller and tighter art community. Notable art critics and other tastemakers fawn over their works and interpret them for the rest of us. Galleries display their canvases reverently for all to see. Adoring art professors coo over them. Moneyed connoisseurs gab about them at fashionable parties. When a collector pays $140 million for a Jackson Pollock splatterfest, he’s essentially paying for the ultimate designer label in modern American art. Meanwhile, countless artists of superior talent languish in obscurity. They never made the right connections at arty New York soirees.

The influence of contextual pricing. Sounds like an arcane principle borrowed from an economics textbook, but it’s really a simple matter of habit: we become accustomed to paying much larger sums for some types of goods than for other types of goods. For example, I think nothing of spending $150 for a single night in a serviceable hotel, yet I balk at paying $12 for a tempting jar of lime-ginger preserves that could give me pleasure for the better part of a year. Why? Because I know that far too many decent hotel rooms fetch $200 or more a night, while I can enjoy a comparable jar of preserves (though maybe not lime-ginger) for $7 or so. We’ve grown accustomed to hotel rooms, restaurant liquor, college tuition, theater tickets and works of art being grossly overpriced… so we tend not to protest when we have to pay up. Maybe we should protest.

The widening gap between the super-rich and everyone else. Today’s outrageous wealth disparities account for much of the outlandish pricing. After all, we live in a society where Donald Trump commands $1.5 million for a one-hour speaking engagement while the wretches who write for online “content farms” earn $5 an article. Of course the Donald Trumps and their colleagues within the top .001 percent can part with $100 million plus for a work of art; that princely sum represents a few months’ income for their crowd.

In short, the billionaires rule the art world, as they rule over so much else today, from sports to banking to entertainment to politics. No surprise there. We have to appreciate the irony of struggling, perspiring, emotionally and financially tormented artists posthumously earning millions while feeding the egos of billionaires with money to burn. It might be a little more surprising that those billionaires actually take an interest in art. I suppose that’s a good sign, though of course they’ve forever lifted notable art beyond the budgets of petty-bourgeois players like you and me.

If we require any consolation, we can always open our art books or visit the local museum. Better yet, we can buy the works of talented, little-known artists whose works grace the walls of local galleries and coffee-houses. We even can buy ourselves a nice reproduction of “The Scream” for considerably less than $120 million. It’ll be Munch’s original version, too — not his shoddy pastel knock-off. And we won’t have to live in fear that the cleaning lady might spray it with Endust.

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The price of anything is solely what a buyer and sellor agree on.
There is no such thing as an intrinsic price. The concept of contextual pricing is equally ludicrous.
All money is a matter of belief – its value is what we chose in the way we use it. There is no “use value” gold that would justify $1800/oz or whatever ti is at the moment.

The only means of establishing the price of anything is the marketplace. There have been numerous other “theories of value” – the PHYSIOCRATS some of the earliest economists, beleived that all value came from the land and agriculture. Marx created a labor theory of value. There are utilitarian theories of value.

“Value is not intrinsic. It is not in things and conditions but in the valuing subject.”

You decide what value is for you every time you chose to buy or not buy something. As well as when you chose to sell. We all do both in equal proportions. You can not buy goods if you do not sell your labor. The choices are not always pleasant or without consequence – but absent force they are always free. And the only way to know what anything is worth, is to buy or sell it.

The ultimate currency – the only currency, is the wealth we create.

So some billionaire has decided that whatever benefits they get from possessing some version of “The Scream” is worth $120M. I am not personally willing to part with $120M for the pleasure of owning the scream. Probably not even if I had billions.

Of course art sold recently is priced higher than art sold decades ago.
It used to be possible to buy a car for $3,000 too.
Presumably you have heard of inflation – again something you can blame your government for, because the natural trend of free markets is towards gradual deflation.

With few exceptions in the modern era art has always been funded, bought and sold by the wealthy. Nothing has changed. Look what we got when Hitler funded art ?

Do you know where the US National Gallery of Art and everything in it came from ?
Hint, think bane of the left, notorious robber baron, Wizard of Wall Street, ….

You claim that these ridiculously high prices are driving art into secret private collections.
This is simply false. Auction houses are typically selling privately own – not publicly accessible art to other private individuals. “The Scream” has not been moved from the public to the private domain. Conversely, Virtually all publicly available art, was either donated by private owners, or is on loan to public galleries from private collections.

Absolutely the National Gallery has little ability to compete the entire budget of the National Endowment of the Arts is only slightly more than the price of “the Scream”

The smithsonian has a budget of over 3/4B but 80% of that is for salaries – and almost nothing for aquisitions – yet it receives almost $200M in donations each year.

Oh, and by the way, not only was all the art in the national gallery donated – most of it by a single individual as one gift, but the entire cost of construction was paid for by the same individual.

Neither you nor I need to care what “The Scream” sells for. I would not buy it for 10,000 if I had it – even though I think it is a fantastic work of art. It is still not work $10,000 ot me personally. I also would not pay Tiger Woods $75M/year or Kobe Bryant $50M, or Johnny Depp $77M, or DiCaprio $75m, or James Cameron $250M or John Hammergren $131M. Oh, and BTW CEO Pay has declined by almost half since 2000.

But these people are being paid these “exhorbitant” amounts – because others – with the money to pay them believe that they will make far more from their services than they pay for them.

In the end it does not matter. Something is worth what someone else is willing to pay for it – no more, no less. The buyer and seller each have their own reasons for settling on a price – and each and every buyer and each and every seller in each and everyone of the trillions of transactions that occur – world stock markets alone are approximately $1T per day. has their own reasons – possibly even ones they are not conscious of.

That is how value is determined. Each an everyone of us, in each and every decision we make.And there really is no other possible way. There is not enough computational power in the entire world to do what humans do every single day – set the relative value of everything in proportion to everything else.
The markets do nto do that perfectly but they do that quite well.

During the 19th century on two separate occcasions, the US government slightly mispriced gold in relation to silver, and the results were economically disasterous – recessions or depressions. The so called “Ponzi scheme” was actually a legitmate investment that took advantage of a pricing error for international stamps. Ponzi’s only mistake was not grasping that absent modern computers he could not execute the trading he needed to produce the profits he promised in the time available to him. Today the same scheme would have worked.

Governments have an abysmal record with regarding prices. Need I remind you of the 1970s gaslines, and Nixon’s wage and price control’s ? But closer to home, the root cause of the entire mess we are currently in is government mis-pricing of mortgages.
The housing bubble would have been smaller, the default rates lower, and the financial community able to sustain them had mortgage rates for Alt-A and SubPrime loans been about 1% higher from 1997 through to 2006.

Please. Please do not suguest any other scheme of process for setting prices. you do nto have to like it, but there is only one that has worked. Every other method has failed disasterously.

Dave: Don’t worry; I agree with you that most items are priced according to what people are willing to pay for them. If the prices went too high, people (sensible people, anyway) would stop paying. But don’t underestimate the pernicious effect of “contextual” pricing, either. It’s my own term, and I have no idea whether it’s based on any textbook economic prinicples… but it SHOULD be.

My theory of contextual pricing is this: we grow used to the idea that some categories of items are really expensive beyond reason. Take a glass of wine at a restaurant. I could buy an entire bottle for the $10 they charge for a single glass, yet we’re so used to paying inflated prices for single glasses of wine that the distorted price no longer registers as an anomaly in our minds; we go ahead and pay because, within the context of overpriced restaurant wine, $10 no longer seems excessive. It’s a kind of gradual hypnosis.

Oh, and by the way… all those “top 40” art prices were adjusted for inflation. And every single one of them sold since 1987. One factor that could account for the disproportionate number of modern works in the top 40 is that it’s rare for an Old Master to go on the market; most of them have permanent homes in museums. Still, an extremely RARE Leonardo painting, the portrait of Ginevra de’ Benci, didn’t make the top 40 (even in inflation-adjusted dollars), which is absurd. You see, it sold in 1967, before the new Gilded Age began.

This is Fredrick Hayek’s 1974 Nobel Prize Lecture on “The Pretense of Knowledge”,
only parts of it address prices. But virtually every sentence is full of incredible insight.http://mises.org/daily/3229

I would also offer that in 1974 when this was written, Gerald Ford had just become president. The Keynesian Phillips curve was still considered economic Gospel.
Not only is Hayek foreshadowing the consequences of government economic manipulation in the 1970’s but he is prescient with respect to our current mess.

If you attempt to imposed external order on a spontaneously ordered complex system, the consequences will be bad.

We can understand the “laws of supply and demand”, we can quantify the ways in which prices respond to changes in supply and demand, but we can not presume to know enough to exercise control. Even though the basic principles are relatively easily observed and understood, the system itself is far too complex to be controlled.

When you attempt to constrain individual liberty – even for positive good, outside what is absolutely necessary, you unpredictably distort what you are trying to control. Whatever you causal relationships you presume from correlations, fail to hold when you alter the freedom of the actors. It is sort of an economic Heisenberger uncertainty principle. You can observe, you can use the conclusions of your observations to participate, but if you attempt to impose control, the system changes such that whatever knowledge you gained is no longer applicable.

In 1979 I purchased a micro computer. It cost more than $6,000
Today I can buy a toy computer for less than $10, that is ten times as fast, has 20 times the memory and has more bells and whistles.

The same market that has taken “the scream” from way outside your and my ability to purchase to may may outside our ability to purchase, has taken other valuable and extremely costly items and made them affordable to everyone..

In the early 80’s I bought my first “entertainment system” a turntable, amplifier, radio, speakers and cassette deck – $1000. Today I can put 1,000 albums on an MP3 player that I can buy for under $100, that also takes pictures, has better sound quality, downloads from the internet, has more power than my 80s computer, and is a cell phone too. Throughout the aisles of Walmart are items that did not exist in 1970, or were so expensive only the rich could afford them – easily affordable by even the poor.

Yes, the rich payed big dollars to have the new inventions in their homes and the money spent went into making assembly lines, producing more research and development, and also many involved in the process to pocket money as well.

Eventually so much money was being made off rich people that the items became plentiful and cheaper to get out to many and the CEO’s got richer along with the others in the hierarchy structure.

Eventually at some point successful people are usually called evil rich people who don’t pay enough in taxes.

The poor said “give us your money rich man” when times became tough in a recession. So the rich people moved their money overseas.

When economic times improved the hate toward rich people subsided, but every time a new recession came the poor man blamed the rich man. It wasn’t a particular rich man such as a banker who robbed and tricked others out of bad loans. It was hatred for all rich people.

A man who heard the poor man’s plea to punish the rich man came to aid the poor man. He said “tax the rich…..for they all are evil”. The rich man said “you make the laws now and have made the laws in the past. When I was good you left me alone. When I was good and the poor man suffers you criticize me. You don’t go after the thief who has money equal to me, but make me his friend” “I do not know this thief although I share the same amount of wealth” “When will I as a good person with wealth become left alone in bad times? Do I not suffer in recession? Do I not invest my money daily…not in expenses, but in risk on stocks on the hopes that my money will grow?”

The man representing the poor man replied “You have been good. You have also need to find a way to “give back” the poor man more so in this bad recession” “You are not responsible for the poor man’s problems… the banks are responsible” “Because you are rich, equal in value of the banks, and that I am running for a place in politics I must find you in contempt of not being fair to those beneath you in wealth” “I give fully to the poor man what I deem necessary” “When a recession hits most poor suffer, except me! as I see myself as the “savior” for the poor man” “I take from American paychecks, rich, middle and poor workers and give to those in need”

The rich man replied “I give what I deem necessary also”. I hire poor when I can afford to do so and I have to make cuts when I can’t find the means to pay their wages” “You criticize me when I am trying my best to grow in difficult times” “Why don’t yo go after the thief instead”

The politician replied, ” I can’t, the poor man thinks you all are crooks! and I have a job to upheld as well as move up the political ladder. The rich banks tricked the poor man and the poor man thinks you as equal as the thief because you are rich. I lent my own money to the banks to save them off the paychecks of the working class and now I have made a a ton of money that has been paid back with interest. I will make more by forcing you to pay more in taxes”. “You can’t stop my spending habits. I need the money. I borrowed from China and other nations and now is the best time to take your wealth as the majority of poor supports this cause.”

Rob, I prefer to think of it as a person educated to be optimistic enough to be enlightened over new things than a person closed minded who thinks they know it all. I think you have it right.

If a person is optimistic, then the value may be high for such art if one is really “enlightened”. Otherwise, the value to the art would be near void.

The art is just art. It is mankind that determine’s it’s value to society.

You can make crap look good, but mankind determines its value in society. The time, resources and the artist who made the art…not to mention the look of the art which is something each individual determines with their own best “educated” knowledge or state of mind.

Thanks, Rob. I think Pollock was an interesting artist for his breakthrough technique… and most of his canvases have a liveliness and balance that’s appealing to the eye. But he essentially produced the same painting (in different colors, some with dark verticals or whatever, but pretty much the same idea) over and over again. He’s not a fraud, but I don’t think he belongs in the upper firmament of artists, either. Just my admittedly subjective opinion. As for Warhol, he was a genius only in his undeniable skill at promoting himself and leeching off the glamor of his celebrity subjects.

I agree, excellent piece….although, I must say that can’t get myself too exercised over this stuff. Wealthy art collectors and patrons have been around for centuries. The government tacitly acknowldges the importance of wealth and patronage in the arts by setting up federal agencies like the NEA, which of course uses billions of dollars of taxpayer money to encourage artistic endeavor of the type that its bureaucrats consider worthy. Sort of like how wealthy Renissance patrons and the Catholic Church used their enormous wealth to finance art that they considered worthy. I mean the de Medici’s were bankers who essentially inspired the Renaissance, right?

My favorite history professor in college used to love to use the phrase “nothing is really new under the sun.” And, I have found that it is easier to maintain a moderate view of things by keeping that in mind. (By the way, are you admitting to having a cleaning lady?)

Priscilla: True about the super-rich and their longtime role as art patrons; I admitted as much in my piece. And yes, the government has been getting into the act, too. But what really interests me is the way the top prices for art have been skyrocketing in tandem with the fortunes of the new elite… especially the relatively inflated prices being paid for overhyped pop artists and the like. When art patrons pay more for a de Kooning than for a Leonardo, something’s seriously wrong somewhere.

And yes, I confess… I have a cleaning lady come in once every three weeks. The most beneficial effect of this arrangement is that it forces me to tidy the house every three weeks so she can do her cleaning. It’s a little odd that I’m paying partly for my own labors, but it’s all for the best.

I do not think this is a good post. The post is self refuting. Why do you care ? It is your own fascination with and desire for works like the scream that give it its value. If you and everyone else did not care so much it would not be worth so much.

It is not that the prices is so high that bothers you, but that no one will buy it for you.

While it is an excellent foil for the arguments, I have tried to make,
this is a pointless lament that some things are expensive.

What price would be correct for one of the most well know and instantly recognized works of art int he world ? Half this ? 1/10th ? 1/100? 1/1000? It would still be unaffordable to all but a tiny part of the world.

If the price is wrong – why ? I can tell you exactly why the minimum wage – which is not actually a price but a price control, is wrong. Why is the price of “The Scream” wrong ?

We live in a country where the vast majority of what is produced is affordable to most of us. Walmart has acres of goods that nearly all of us could purchase – even on a whim, if we desired – yet you whine that there are a few things that only billionaires can afford.
And conclude from this that they control everything.

The enormous amounts of money in entertainment and sports (and really everything else) comes directly from us. If Kobe Bryant were dependent on the patronage of rich basketball affectionados he would live in poverty. His salary is determined by us.
When you buy a ticket to the theatre, a DVD, or what a movie on Cable, you are paying the salaries of the actors and producers in Hollywood. If you want celebrities to be paid less – take less interest in them.

Should there be nothing out of reach of anyone ?
Walmarts sold more than $50 in goods last year for every man women and child on the planet. The median world income is $1700. Little more than a decade ago only people in the affluent nations of the world had phones. Today there are 4.6B cell phones – that is two for every three people.

For much of the world a Phone provides more value than “the scream” – and clearly most of the world can afford one.

I would imagine that the new owner of the Scream will spend another small fortune to assure that the cleaning lady does not spray it with endust, that it is not stolen or damaged in a fire, and that it is well insured. i am certain they will take better care of “The Scream” than governments throughout the world do with the art and other valuables they own.

Rob: Dave (a.k.a. asmith) is our resident libertarian gadfly. I understand your exasperation, but I don’t mind his criticisms. Though I can’t possibly read all his comments, he’s generally informative and reasonably polite, and he keeps me thinking. No harm in that.

Totally out of context here, but does anyone think the little neurotic fellow in “The Scream” might have been the model for Mr. Bill (assuming you’re old enough to remember him)? I can just hear him yelling “Oh no!!!!!”

Updating a prior blog entry – Martin’s autopsy report is apparently public.
Bruised and broken knuckles, and a fatal gunshot wound. No other injuries.
Zimmerman saw a doctor the next day in order to return to work, and that report is also available. two lacerations on the back of the head, broken nose, two black eyes, a bruised upper lip, and a back injury.

So what’s your point, Rob? That it was a good thing that a young punk got himself killed before realizing that kicking some terrified guy’s ass was not worth giving up his life? Or that, as long as he was gonna get himself killed, he took the other guy down too?

BTW, the Trayvon Martin case seems to get more complicated with each new nugget of information that’s revealed. Trayvon definitely attacked Zimmerman, but Zimmerman probably provoked him. The question is the degree of provocation and the appropriateness of the response: whether Trayvon overreacted to Zimmerman’s sleuthing or simply showed justifiable outrage at being tailed by an obnoxious vigilante. If Trayvon hadn’t been high, he might have restrained himself from bopping Zimmerman and causing him to pull the trigger.

Think about money as a product that should be affordable for every citizen.
In the moment a rich asshole buys art at skyrocketing prices, these money are actually dumped in the sewers like milk in the economic crises (so the price of milk won’t go down).

Whoever asshole got the money from the art, has the possibility to buy overpriced products that majority of citizens can’t afford.

In other words, people made sacrifices and worked to buy overpriced necessary products, and the profit made by the rich is turned against the very people who worked for these money.

The idea, that if one company rises the prices and its products are not too much bought will fail, is totally bullshit. Also bullshit is the idea that the surplus of wealth from rich assholes is used to economic healing.

Those are things that Adam Smith did not even imagined, for he was a little child of primitive capitalism.

Obama seems to think by taxing them will heal the economy or at least help a little.

You are right about Adam Smith. He was in early viewer of what is called capitalism. Adam Smith seemed to think of it as a way that the lower levels of society would be able to “break” from the “lords” estate and debts. Living in freedom and liberty.

Unfortunately, Now it seems that the people who learned the capitalist way centuries ago have transformed the idea into a “monetary monarchy” or something like a new kind of “serfdom” where the poor support the rich and the rich support the poor with money to live. Thus, replacing the requirement to “live” on the rich person’s fiefdom in literal sense, but only via debt. Which is enslavement by guilt and not by force.

Become debt free is the only way to become a rich and free person. Owe nothing to no rich person, nor poor. True freedom comes to those who trust in themselves to overcome oppression.

Smith was not ignorant of the negative aspects of capitalism. He just determined that the good substantially outweighed the bad. He foresaw that government would get involved and that the effects of that would be harmful.
He foresaw correctly that despite all its problems economic freedom would and has raised the standard of living of everyone – particularly the least.

If anything capitolism has become more benign int he past two centuries. It is also solely responsible for an order of magnitude larger improvement in the standard of living of all of humanity in two centuries than had occured in the preceeding 150,000 years.

If you wish to lament all the evils of capitolism – go back to the 16th century. For almost all of human existance the top 1% lived worse lives than the bottom 10% do today.

Now you not get it through your skull that such comparisons are SPECIOUS?! Look up the damn word if you don’t believe me. No one gives a shit how anyone lived in the 16th century! What we care about is our rapidly DECLINING standard of living RIGHT NOW. I have been unable to find ANY job (my profession, flipping burgers, scrubbing toilets – ZIP) since last September, and now Californians are no longer eligible for extensions of their unemployment benefits. I and hundreds of thousands of others are about to be thrown to the wolves. That’s happening NOW, get it?

Yes, capitalism has been a (mostly) positive force for most of its history (except for slavery, sweatshops, monopolies, and a few other peccadilloes.). But as Rob pointed out, it’s failing us NOW. In the end, the capitalists have to answer for that. I understand that we no longer have a “pure” capitalist system, but the fact is that the “job creators” aren’t creating jobs… at least not in the U.S. This is why I’ve kept calling for Obama to establish federal work projects, a la FDR. We need to relieve Americans from financial distress so they can start spending again. (Call it the “trickle up” theory.)

Valdo: What you’re saying is that the trickle-down theory is essentially horse manure. I’m inclined to agree. Most of the rich don’t create jobs, though corporations used to in the old days. And the money from exclusive investments like hedge funds and derivatives circulates only among the rich. On the other hand, the rich do need a middle class to buy their products and invest in their companies… but now that they’ve ruined the US middle class and gone global, I suppose they can turn to the Chinese middle class for support.

Kent: Yes, I can see a new age of serfdom ahead. And we all know what history has called the long era of serfdom in the West: the Dark Ages.

First like it or not, it is not trickle down, it is trickle up. An excellent return on investment is below 10%. That means a rich person must forego the immediate benefit of their own wealth for 10 years to double it.

It also means that during that time – and on into the future past that, 90% of the value of their wealth is benefiting someone else.

You have this odd view of complex investments.
There are only two possibilities – hedge funds and derivatives, and …. are real investments that on net create real wealth somewhere – about 10 times as much real wealth as the net direct benefit to investors, or they do not create wealth, in which case they are zero sum. All winnings must be paid by losers. And you can not be either a winner or a loser in that game unless you are a participant – so if Hedge funds and derivatives and … are this game played solely by the rich, and if they are not real creators of wealth then the winners and losers are all rich people.

In fact hedges are a form of insurance.
When farmers need money to plant they sell investments in their future harvests. People who buy those futures are taking a risk – their might be a drought or something. So they find an investment that will improve if their initial investment declines.

Real insurance companies often have exposure to unlikely events beyond what they can afford – they lay these off, in the re-insurance market. This is actually a low return market. With generally low risk, but if the freak event occurs, you could lose the entire investment.
Again, we have insurance companies “hedging”.

Derivatives are just investments that have multiplier effects – when they do well they do very well, when they do badly they do very badly.

The reason only the rich participate in most of these investments, is because your government has decided that you are too stupid to do so. That they are too risky.

There is this fiction that the financial markets do not create wealth – this is the same fallacy as the french physiocrats who beleived all wealth had to come from the soil.

When Katrina and Andrew struck, insurance companies paid up, and they did not go bankrupt, and were not bailed out by the government. Despite billions of dollars of losses – well beyond their reserves. The world did not come to an end and government did not have to bail anyone out, because insurance companies “hedged” their risk, in the re-insurance markets.

If you were a home owner whose house was destroyed and you received money from your insurance company, they you should be quite happy that the insurance companies actively “hedged” their insurance.

If you want to see what the poor with have in a few decades – look at what the rich have today. since the time of Smith, The luxuries of one generation become the necessities of the next.
eyeglasses, cars, phongraphs, light bulbs, vaccum cleaners, toilets, dishwashers, air conditioners, refridgerators, televisions, phones, cell phones, computers, …..

I think one of the most provocative issues from this column is whether the owner of a work of art has the right to destroy it — like the Japanese tycoon who wanted to have that van Gogh portrait cremated with him. On the one hand, private property is private property; on the other hand, we need to protect art treasures from vandalism and destruction because, in a sense, they belong to the world.

Do we designate certain great works (even privately owned ones) as cultural landmarks, the way certain buildings are protected via landmark status? If I bought one of Hitler’s watercolors, would I have a right to burn it… or is it of historical value? I suppose I could do anything I want with my mother’s paintings, because their value is confined to my own family. I’d be interested to see what you think.

Perhaps the United Nations should establish a committee of academics, private art curators and museum officials to establish a “directory of classics” that can be privately owned and displayed but not destroyed (or at least not deliberately). But the law would have to show some fangs to work.

I don’t know how works of art would ever be able to be truly protected from destruction….I think Rob’s idea of a international body of curators and other experts has merit, but only to the extent that it would confer some sort of status to certain works of art that might reduce the odds of them being destroyed. As far as I’m concerned, Rick, if you owned one of Hitler’s watercolors and destroyed it, that would be your right. I would consider it an unfortunate decision, but I would certainly disagree with anyone who wanted to fine or jail you for it.

I was in LA recently, and drove through certain very wealthy neighborhoods, in which the architecture and grounds of some beautiful old mansions have been very drastically altered by their new owners, mostly middle easterners with a different aesthetic. In some cases, the original homes, many designed and built by renowned architects of the early 20th century, have simply been summarily destroyed, and replaced with new structures, many of which are considered virtual eyesores by many locals. But to the owners of the property, the new mansions are improvements.

I realize that there are differences between dwellings and paintings, but, where do you draw the line with art and beauty? Or even what will be of artistic or historical significance decades or centuries from now? Maybe people in the 24th century will revere “Jersey Shore.”

You do not draw the line. This history of government involvement in art and architecture is absymal.

Hitlers efforts to suppress so called decadent art were not some aberration. They were fully in line with the efforts at censorship and suppression of governments everywhere.

Government power is not about creation, it is about destruction and suppression. Its purpose is not freedom, but to supress our violence towards each other. Growing that power increases the suppression, not the freedom.

When we make something we are certain is bad illegal, we suppression myriads of good things we have not even imagined.

Nearly every great artist was disregarded in his time.
Munch’s work was considered amateurish and unfinished.

Another artist was forced to paint cloths on the figures in Michelangelo’s last judgement in the Sistine chapel.

When government wishes to tear down or destroy something – no power on earth can stop them.

When business wants to destroy or seize something of someone else – all they need do is enlist the power of government.

If you actually bother to study property rights, you will find that all the things you wish to protect are far less safe the more government is involved.\

Governments take abysmal care of the assets they own. While some private owners are destructive the vast majority value their property. Nearly all the top superfund sites were created by government. Governmet – local, state and federal is still by far the largest polluter.

Government is also generally abusive of the property of its citizens. There is really very few good examples of the use of eminent domain and myriads of abysmal ones.

Government subsuming rights in property – pretty much always means the destruction of property.

You complain that great works of historic architecture have been destroyed by new owners.

But the net effect of government in the building construction industry has been to prevent the creation of great works.

I doubt any of Frank Lloyd Wrights works could be built today. Certainly neither Falling Water nor Teliesin could be.

The left decry’s Walmart, strip malls, suburbia, but these are all the direct result of regulation. We have decreed that land use must be homogenous, that people can not work from their homes, that their places of employment and where they purchase goods, must be distant. In doing so we destroyed small businesses and advantaged large ones.

A few decades ago Holiday inn promoted anti-billboard legislation – sounded all warm and friendly. But their objective was to prevent small motels from competing.

Governments everywhere are in debt beyond their eyeballs and teetering on bankruptcy.
We are looking at Greece round 3 or 4. Europe is slipping back into recession – if they ever actually came out. They are threatening to drag us with them.

Our government has blown about $5 trillion trying to stimulate the economy – and failed.

Social security, medicare, and government pension and medical programs across the country all have unfunded liabilities on a scale that would jail private directors for criminal fraud.

more that 50% of our children are getting crappy free lunches from the government every day. Over 80% are receiving government subsized lunches.

Even if you swallow whole the purported sins of the free market – by far our largest problems are with government.

Yet what you all want is to take money from those who at worst have not failed nearly as badly, and give more to those who have screwed us all over.

Your angry with rich people because you think they pay too much for art. But they spent their money. The government is blowing YOUR money – and you want to take more from those who are your only hope for actually getting out of this mess.

Open your eyes. There is only one way out of our current mess.
Government is not and can not create jobs. Not Obama, Not Romney. The very best they can do is get out of the way.

I do not understand how anyone who has lived through the last 4 years can still have any faith at all in government.

Are we all scorpions crossing the river on a frog. Intent on self destruction.

How do you reconcile the argument that “The Scream” is not worth $120M with the argument that it is so valuable that governments or event he UN must protect it from destruction ?

If something is so valuable that it can not be destroyed, then it is certainly worth $120M.

The city of New York is in the midst of almost $1/2B in renovations to the Javitts center – which they intend to destroy to build something else. The Javits center itself resulted in the destruction of an enormous residential area in NYC – certainly plenty of historic architecture.

Nice post, Rick. I’ll give you 90 million for it. First I have to get the 90 million. My plan is to get my hands on the original clay figure of Mr. Bill. I’ll auction it off, perhaps at the next Oscar or TV Awards ceremony. Adam Sandler might buy it. I don’t know how I’m getting into the Oscar ceremony. I might try to sleep with Angelina Jolie to gain access. I don’t have my plan all worked out yet. I’ll call you when I get the money.

Those outrageous sums paid for paintings are of course more than just a matter of supply and demand. As you related in different words, they are also examples of the CRAZINESS of “perceived value” and of the exponentially expanding wealth at the tip of modern society’s pyramid. During the times that Elvis Presley and the Beatles were topping the charts they were achieving gold record status. Later bands and musicians were regularly surpassing gold to platinum and multi-platinum sales because there were more fools buying and the distribution channels were even more savvy, ubiquitous, and entrenched. (Then digital and Napster came along and the music game changed a bit.) Anyway, as the base of the pyramid gets bigger with population some of the wealth at the very top gets more outrageous. I am hoping that succeeding generations will learn to not need the “ savvy distributors” at the top so much.

Amen, Pat. I’d give you at least $30 million for this comment if I were a multi-billionaire like Mark Zuckerberg. And you raised an interesting point that I hadn’t really thought about: in pop culture (less so in the art world), the vast base of the pyramid helps fund the excesses at the top. Hollywood couldn’t pay its top stars $25 million a picture if the masses weren’t going to see those pictures in droves. Movie tickets are still reasonably affordable at least, but sports, concert and Broadway tickets have gone through the roof. At some point the masses should probably go on strike to reset the ticket price meter — but of course they won’t.

Our increasing access to broader markets – from my home I can easily price and buy items from anywhere in the world. Distributions channels are shortening, compressing and speeding up. Price as well as trust and reputation information is more readily available for any potential purchases

The value that “savvy distributors” provided in the past is diminishing – BTW that does not mean they did not provide value, just that we have discovered new means of securing the same value at lower cost.

I would also note that those “savvy distributors” that are at risk of losing their cut of the pie in the changing economy are actively engaged in seeking protection from government – give power to government and it will be used – though not likely in the way you had hoped.

As I have claimed repeatedly, the trend of truly free markets if for ever decreasing prices overall.

The increase in in information does not alter the fact that price is subjective, it just increases the information we have available to make our decisions.

This is all the normal way that markets work. It is how they have always worked.
Marco Polo going to china, and Columbus heading west to rich the east indies, were just early efforts at expanding the markets, at bringing goods and services from the world to our doorstep more efficiently.

I do not know how this will continue to happen in the future – if I did, I would be set to join the uber rich at the pinnacle of the pyramid, and buy myself a Renoir, Van Gogh or Munch. but i do know that it will happen. Tomorrows poor will have the toys of the rich today, at prices they can easily afford. Markets will be even more global. The real wealth of humanity per capita, and aggregate will be greater than today.

Unless I managed to foresee and capitolize on the means by which we get there, A renoir, Munch or Van Gogh will be further out of my reach than it is today.

The laws of supply and demand mean that where supply is elastic in but for a very few items – there can never be another “The Scream” or “Starry Night”, supply is highly elastic, and therefore we have mega flatscreens and ipads, and, ipods, and …. at prices even Chinese factory workers seem to manage.

Do you understand that though your analysis is flawed you are making my points.

“The Scream” is worth $120M because there is only one (alright maybe 4), and there will never be more, and lots and lots of people – some with substantial amounts of money want it really bad.

Movie prices are stable, because there is really no limit to the supply. If demand increases prices will increase and more theaters will be built. If demand decreases theaters will close.

Expanding quality live performances is far more difficult. Hence broadway and live concert ticket prices rise – but there are limits. If the prices go too high then only the rich can afford them and the rest of us seek out lessor artists, or wait for CD’s and DVD’s.

If you wish to organize a strike against Broadway or Springstein in order to bring prices down – go right ahead. Though so long as the supply is inelastic you will get nowhere.

Springstein has been trying and failing for years to keep is concert prices affordable. All he has managed to do is to create a more profitable market for scalpers. Anytime you attempt to manipulate a price artificially you will create conditions for someone else to profit.

The subjective nature of prices is the means that the market matches supply and demand. High demand drives prices down where supplies are elastic – which is true of most things, and up where they are not.

Of course “The scream” is not worth $120M to you – or you would have bought it.
If you paid $200 for your Broadway or Springstein tickets then by definition you thought that was what they were worth, or you would not have paid it. If you chose not to then you established they were not worth that much to you.

I’m running a special this month: buy one of my comments at the regular price of 1.5M and get the second one absolutely free!

Sure, there’s a set of differences between the sale of pop music for example and the sale of top “art treasures,” but I’m saying that the price tags of the art treasures have gone up because the buying power of the uber-rich has gone up to outrageous heights (as well as the salaries of sports figures and entertainment celebrities but not to the level of the uber-rich) because the populations/markets that they’re distributing to (through their various global holdings in the case of the Big Owners of the world, and through TV/mass media in the case of sports and entertaiment celebrities) are growing and expanding.

A local business person with thirty or fifty regular customers may have a wad of cash in his or her pocket, but the global mega corporations are looking at (trying to gain access to and getting better and better at it) 6 billion customers monthly, weekly, and daily, depending on the products. When I video taped the processes at Just Born candies in Bethlehem PA in the late nineties (Mike & Ikes, Hot Tomales, and marshmallow Peeps are some of their products) they had recently gone global and had 3 shifts a day making marshmallow peeps for around the world, but they couldn’t make them fast enough at the time to meet the demand. The bottom of the population pyramid is freakin’ BIG, and with our current systems that can lead to outrageous piles of money at the TOP.

Absolutely the size of the market leads to outrageous piles of money at the top – and everywhere along the way. Just Born Candies did not run 3 shifts to make Warren Buffet richer – though that might have been one effect of their growth.

Global markets mean that ordinary mass market goods with infinite market will be produced and sold by corporate giants. No sane person would seek to start a small business competing with Proctor & Gamble producing toilet paper.

But they also mean that goods and services with insufficient local market to be profitable, can be very profitable for a small business in a global market.

Further even huge businesses have discovered that making a good product for a low price is insufficient. some of us want scented toilet paper, some quilted, some quilted and scented, or multiply, or with long fibers or short fibers, or fair trade, or biodegradable, or …..

Contrary to the predictions of the progressive economists of the last century as markets and businesses have grown products have expanded and diversified.

Any mom and pop organization can easily become very well off if not super rich on products that would not have sold enough to keep their doors open a few decades ago.

Further larger businesses like Amazon and eBay provide reputation and trust services that make selling globally easier.

Regardless, the ability of the “uber-rich” to buy “The Scream” or whatever comes directly from their ability to provide the bottom of the market with the goods and services they want at prices they can afford.

As Rick noted, if we cease to go to Broadway performances ticket prices will drop.
Woods, Depp, DiCaprio, all of the somewhat rich, rich super, rich, uber-rich, … must provide the rest of us something we value sufficiently to aquire their riches.

There are really only three ways to aquire something of value.
Produce it yourself.
Produce something else of value and trade for what you want.
Or steal.

Hello Dave, how are you? I’ve been away stimulating and bolstering our economy. I’m seeing some upward economic trends, so I think it’s safe to come back to TNM for a spell, haha.

I agree with your post above. I had to rub my eyes and re-read it to make sure, but I think you stayed within boundaries I can accept. Well, to an extent..

Let’s see if we can discuss the example of a baseball player who demands a 35 million dollar contract and gets it.

I believe you would say that he can get what the market is willing to pay. Fair enough to an extent, but let’s take a closer look.

That baseball player’s skills would not have gotten him anywhere near 35 million dollars a few decades ago. This is nothing to do with inflation adjustments. This is because baseball is now further empowered by advances in TV/mass media and because baseball has become further intertwined in our culture and with powerful advertising dollars and because the bottom of the pyramid (population) is bigger and bigger. Another way to say it that a vastly larger number of people spend their time watching baseball on TV and advertisers will pay to reach those people. Ticket sales to games is just a small slice in comparison.

The importance that baseball and other sports has in our modern lives is preposterous, foolish, a tad insane. We’ve got very real serious problems to deal with, but about a hundred million average American Joe’s just want to watch and talk about sports. (Incidentally, I grew up fully immersed in sports, playing & watching, as a kid putting the little football helmets of the two teams playing on top of the family TV during a game, sleeping with a football to improve my catching hands, and later playing ice-hockey at the semi-pro level, and so I enjoy a good game now and then, and the value of competition, but, thankfully, later in life I realized how much of a distraction and how unhealthy and stupid all this excessive sports fanaticism is, especially when we’ve got serious work to do…

So, Dave, et al, the market value of the baseball player is based upon an entrenched industry that is based to an extent upon foolishness and stupidity, not real value for the fans. It’s a “perceived value” that is largely a false value. We don’t need to be spending so much time viewing sports. This situation is akin to the 120 million dollar art treasures. It’s a perceived value in a specific context. Give a man lost in the desert the choice between diamonds, a Van Gogh painting, or a glass of water…

The laws of supply and demand are out there working, very real. But some contexts, like the uber-rich and so-called “art treasures,” have as much to do with human craziness as scarcity & so-called value.

If you are asking me to agree that baseball players – or anyone else may be able to receive pay that is radically different under different conditions.
Absolutely.

Water as an example is an absolute necessity for life. Little is more important – yet because it is abundant we pay very little for it.
But if we were in the middle of a desert dying of thirst – we would probably be willing to give everything we have for a drink.

That is the entire point. There is no such thing as a fair price or objective price, or price based on merit, or on the value of the resources used or utilitarian price, or use price or ……
Under some even many circumstances any or all of the above factors may be measured. But the price of anything is what the buyer and the sellor freely agree to – nothing more. And by free, I mean neither the buyer nor the sellor puts a gun to the others head. The agreement is still free and the price is still “legitimate, fair, appropriate, …” if you are in the middle of a desert dying of thirst. Circumstances you got yourself into, or nature put you into or anyone other than the other party put you into, that are purportedly “coercive” are irrelevant.

I do not happen to think most entertainers, celebrities, sports stars, …. are worth what they are paid – meaning I would not chose to pay them that, and I normally chose not to see sports live, or really even on TV much, go to movies in theatres, ….
My “vote” on prices is cast by my actions and choices with respect to those values – and the market weighs my input and determines the price for those celebrities. Not the fair price, not the …. price.

This may all seem arbitrary and “unfair”. We all have some sense that there is or should be some intrinsic price to everything. To an extent there is, but that price is different for each item for each of us.
There are not enough computers or bureaucrats in the world to factor each of our different setts of intrinsic prices and arrive at a price that will actually work without disruption. But the free market does that trillions of times everyday, and adjusts instantly to changes in conditions and preferences.

You may or may not like that, but you can not come up with a system that actually works better. The best you can do is comeup with one you like better. But unless everyone else feels very close to the same – it will not work.

Worse still even if we had the technical ability to weigh each and every preference and factor to arrive at the price that would work with the least disruption, most of the factors effecting price are subconscious preference – we do not think deeply about them. But that does nto mean they are not real or important.

If all of this sounds distant from your life and esoteric – what does it really matter if we get prices right ?

All you need to do is look arround you.

The root cause of every single economic mess in existence is a price failure.

It is irrelevant whether you beleive government was the cause or the market. Whether the price that failed was credit, or risk, or Mortgage Backed Securities or Credit Default swaps, or ….
Regardless, the failure is a failure to get the price of something right and the consequence is economic disruption.

Kent wrote: “I am trying to understand your writing. Valdo.
Are you saying that the wealthy can’t heal the economy or can?”

The wealthy are in for wealth not for health of the country economy. Since when an wealthy asshole is concerned about how healthy is the economy? As long as he has monopoly, control and kick his competitors, it is his only concern. If he can bribe the government or sponsor it through lobbyists to consolidate his wealth, so be it. A powerful government is powerful by defending big corporations. If the government is not powerful, then the corporations will govern. However, all that control is to “heal” the economy. “Economy” term is used just as “smoke and mirrors” for the masses. When you hear at TeVe: “The stocks are up, the economy is improving”, even if the masses are in deep shit, they are hoping, and the wealthy are dancing.

Up to the modern era, a king could be extremely rich while his subjects be extremely poor. Who gave a rat ass about what was the “state of the economy”?

Modern era with its education and technology, gave room for the middle class to appear, but the mentality of those who still can amass exceedingly wealth is no different than the mentality of kings who didn’t give a damn about what the masses needs.

When wealthy are investing, they do not look for the country “economy”, but on how much they can gain, how much profit *they* can make. There is this bullshit illusion that when a wealthy asshole is bursting wealth like a volcano, the masses are happy to eat the “magma”, so that’s how a country prosper.

The truth is that by making profits, the wealthy afford to buy products at a higher prices, thus keeping the prices high and corporations prospering, but you cannot count it as a “healthy economy” for a country.

With all that technology where humans are replaced by machines, and expensive labor in developed country replaced with cheap labor from the third world, the only solution for developed countries is just to kill the poor and the middle class. We already send the poor and middle class as soldiers to die for the wealthy. But those damn soldier keep coming back and asking for help for their foreclosed houses, or that they do not have a job when they come back. Fast, look for another war, the poor are multiplying again!

This is one of the reasons I keep pounding that money is not wealth and that wealth is whatever we need and want.

That is not some semantic trick.

When we say our economy has a GDP of $16T, that means we produce and therefore consume $16T of wants and needs.

It does not matter whether those wants and needs are expensive artwork, dinners out with our spouse or vacations with our kids. They are all the things we decided we wanted and needed.

The reason that FREE markets are so important is that the less free the market is the less likely it is to produce what WE want and need as opposed to what someone else thinks we should want and need.

You can rant all you want about the rich, but they are a small though important part of the economy. You could confiscate all the posessions of everyone making over 250K/year and probably not cover the federal government deficit for this year.

They are neither the cause nor solution to our economic problems. While they are significant beyond their numbers, they are insignificant in the scale of the entire economy.

Stocks, GDP, unemployment rates are all just aggegate numerical means of measuring the extent to which we are producing – and therefore the extent to which we can consume.
Unless we produce – as individuals, and as a nation we can not get what we want and need.

Outside of theft, which is ultimately a negative sum game there is no way to get more of what we want and need than by producing.

The larger the portion of us who are not producing – disabled, retired, unemployed or on public assistance, the less of what we want and need that all of us can have.

If you seriously beleive the idiocy that the rich are not productive – fine, they are still a tiny portion of the total population.
They are neither the cause nor the solution to our problems.

As to investment – of course the rich are seeking the greatest possible return on their investment – and the greatest return is ALWAYS found providing people with what they want and need. Steve Jobs was a genius and Apple has done incredibly well BECAUSE we want iphones and ipods, and …. and we want them really bad.

Someday bother to look at Warren Buffets investment portfolio – the largest portion of it is focused on the things that the bottom third of our society want – because that is where the money is.

everyone here keeps fixating on the pyramid – well if the base of the pyramid is really broad – that means that no matter how poor those people are there is still alot of money there.

It is not the rich are not volcanoes of wealth – we are. The rich get rich almost exclusively by figuring out how to give the rest of us the opportunity to create enormous amounts of wealth – and in return they skim a small percent off the top.
If Buffet has $80B – that means there must be about $1.6T in jobs and goods and services that the rest of us have benefited from just to give him $80B.

The “rich” are pathetic consumers. Think about it. Put together your dream list of all the things you would acquire if your were Warren Buffet – without investing a penny can you spend a fraction of it on yourself. ?

If you spent a dollar ever minute of your life from birth to death, you could not spend $50M in your lifetime. Warren Buffet could not spend all his money if he started at birth and spent a $1 every second. You just can not possibly consume that much wealth.
If you can not consume it the only thing left is to invest it. And even if you invest it, and your investment grows exponentially since you are laready well past the point where you can not possibly consume what you already have the beneficiaries of the investment are SOLELY the rest of us. The rich work for us. The Super Rich even more so. They already have far more than they can possibly consume. If it was all about their own personal benefit they should stop investing and go on incredible headonistic spending sprees.

Exactly how is Gates or Buffet or Oprah better off after their first Billion ?
There is nothing more they can acquire and personally benefit from no matter ho much additional money they have.

While this is obvious with the uber rich, the truth is that the benefits of additional money shift away from the rich gradually – but starting at relatively low amounts of money.
At $250K of income/year, you would have to spend $1 every two minutes to consume it all. Not impossible, but difficult, and the more income you have the harder it gets.

The future may have machines producing everything – though i doubt it, but if you start killing off the humans – particularly the poor humans, you eliminate the entire reason for producing in the first place.

The purpose of production is consumption. We work because we can transform the wealth we produce into the wealth we wish to consume. It is theoretically possible to have a very wealthy society in which few work (even none in science fiction like future scenarios).
But all the things we want and need must be produced somehow. Further no matter how wealthy that society, it would always be even wealthier if everyone worked – even if all we did was crappy low wage jobs.

Even accepting the false presumption the the uber rich are just uber greedy.
How is anything they do harming you ?

I grasp that Rick is overwrought that he can only have a print of the scream in his living room – not the real thing. But if we killed off every single person with more money than he has, there would still be somebody who wanted it so bad they would go into hock up to their ears to get it. None of us are going to own “The Scream”. Get over it.
If you desparately need to see a copy – there are two better versions as well as the vast majority of the rest of Munch’s work on public display. It does not matter whether this copy went for 100,000 or $100B none of us were going to own it.

Take a look at your lives. What is it that you can not have, can not do, can not accomplish, can not be, because of some uber rich person ?
Pretty much nothing. What bad thing might happen to you because of some rich person ?

Are the rich out raping and burning ?
Have we gotten so bad in our own greed and envy that we assume that anyone who has anything got it at our expense ? That we are entitled to steal from the rich because we feel we do not have enough ?

Again look arround you. We are not even talking mythical Robin Hood theft here.
The poor in this country are the rest of the world’s 1%.
If we are entitled to steal from those who have more because things did not work out as we wished – then why can’t the rest of the world steal from us ?

Rick proposes “fair” as the standard for moderates. The median world income is $850.
The 6 Billion of so people earning that or less are no less decent, or hardworking that we are – and out median income is $50K.

The average american is the Warren Buffet or Oprah Winfrey of Biafra.
It is only “fair” that our wealth should get redistributed to them.

Why aren’t they entitled to the benefits of our good fortune ?
Most of them work far harder than we do ?
To most of them our consumption is as avaricious and greedy as the uber-rich.

If the uber-rich are somehow evil, and we are entitled to their riches, by the same moral standards and logic the rest of the world is entitled to ours.

Dave: You persist in contrasting the “wealth” of the poorest Americans with the extreme poverty prevalent in the Third World. By now it should go without saying that Americans enjoy a higher standard of living than, say, Rwandans. The foundation for American wealth was laid in place several centuries ago and continued until recently with a system that rewarded middle class enterprise, education and effort. But that system is virtually broken today.

Certain types of professionals — doctors and lawyers, for example — will always fare reasonably well, though even their fortunes have been sagging lately. The only people thriving in this economy are a select handful of celebrities, corporate executives, and, of course, the movers and shakers in the financial sector; i.e., those who game the system.

So while you’re contrasting Americans with sub-Saharan Africans, I’m contrasting today’s Americans with the Americans of 40 years ago, when there was a thriving middle class… when a college education was within the reach of anyone regardless of wealth, and hard work generally led to success.

Rick;
You have so much wrong. My point is you are fixated on villifying the rich when your own arguments don’t support your claims. Then you wish to steal from them to make reparations for their fictious crimes.

I am not sure that there is a single fact in your entire response that is not demonstrably false.

I have personally been on a financial yoyo through this entire mess. Until recently I was self employed – and despite an excellent job wish I still was. i have had very little work since before this started, and self employed people can not collect unemployment – though they must pay it – though apparently I qualified for food stamps last year. But I have worked my ass off, had some bad breaks and some good breaks. Been lucky and unlucky. And no matter what I am not blaming the rest of the world for my failures or successes.

So no, I do not think my financial prospects are ruined – I am well aware of the pent up entrepreneurial energy in this country. Aside from the whiners who think the answer is to steal from others, I have little doubt that if Government would get out of the way recovery would be swift and dramatic – the longest recessions and depressions in our and world history correspond directly to those the government has intervened the most.

I see where we are and have little doubt that but for the stupidity of our government and those of us who empower it to make things worse the future would be incredibly bright – for me for you, for the poor across the world. Even if the current mess was solely the fault of the Market – and it was actually almost entirely the fault of the government.
Indisputably our greatest future risk – dwarfing the current mess, is the mess our government has created. I would love to here an explanation for how the free markets are responsible for government amassing $16T (much more counting state and local government) debt. We can not tax out way out of this. Nor can we get out of it by stealing other peoples money – there is not enough.

Since the start of this economic calamity income inequality has actually declined to the lowest level since the 70’s. The left is using data from before the collapse. This is normal economic decline costs the upper 40% of us income, and the lower 20% jobs.
There are myriads of other fallacies int eh income inequality argument, but they would take hours to demonstrate. Regardless, bother to look at real data.

What do the bottom 20% own today in comparison to two decades ago ?
Or even to the middle class ? Your old enough to remember life in the middle class in the 60s 70s and 80s. Computers are one of the most dramatic examples, But even in terms of items like TV’s dishwashers, Air Conditioning, Cars – REAL WEALTH, we are all much better off today and the poor are better off than the middle class was when I was young. How many TV channels did you have when you were young ? Did your car have a leather interior, airbags, a CD or even DVD player air conditioning, ……
It is not just computers. you have to work real hard to find something that we do not have both more of and better today. And pretty much all the counter examples are those things most heavily involving government.

Neither you nor I need data from NBER to tell us that – though it is there if you want to look.

Unemployment today is arround 8%. It rose from 4 to over 10% through the 60’s, and 70’s. That concurrent increase in inflation AND unemployment was the first failure of keynesian economics. It is not possible to have both high unemployment and high inflation in a keynesian system. The 4% level that we had from the late 80s for the next 25 years was abnormally low. It is possible to return to that level – but not if you are intent on punishing everyone who might help accomplish that.

There are many things wrong with the US today. There is only one I can think of that is not the responsibility o government. There are few consequential differences between the generations. The single largest being that far too many of us today believe we are owed something. What we can accomplish is limited by what we feel entitled too.
Carnegie and most of the “robber barons” rose from poverty. Even today only a tiny fraction of the uber-rich inherited their wealth. Yet you behave as if they are on some unreachable pinnacle. You create this fake dystopia with some separate permanent class of super rich – and then confuse it with the real world.
“Why do you look at the speck of sawdust in your brother’s eye and pay no attention to the plank in your own eye?” – open your eyes and see the world like it really is.
But for the foul ups of our government, it is actually a wonderful place – far better than it has ever been.

The percentage of us headed to college – 70% is the highest it has ever been.
Yes college is unaffordably expensive – but we are going anyway. And oh the increase in college costs has tracked the exactly government loans.

You fixate on the financial sector. I don’t know about you, but my 401K has fully recovered and even grown since 2009. The average person gets $1 in Social Security back for each $1 they put in (without any adjustment for inflation). There has never been any 30 year period in US history were the financial sector has not done far better.

If we are going to tar and feather Wall Street then we should be disembowling our government.

The middle class is by definition the middle 20%. It is always the same. It can not be diminished. That is a statistical impossiblity. It can be more or less wealthy. And by any measure atleast a decade long it and every other class is more wealthy than it ever has been.

And if you quit looking at the past through rose colored glasses you would recognize that. Certainly the 50’s, 60’s and 70’s were great times to be alive – compared to any prior period in history – since the advent of free markets that has universally been true.

You might want to ask why those “job creators” are tight fisted. BTW for the most part those “tight fisted Job Creators” are not the Warren Buffets – but the guy managing your IRA or 401K. And yeah he is probably doing OK – though I do not believe there is a single individual in this country with $500M in wages. The current highest paid CEO is making $121M/year and only $250M/5years.

I have no desire to malign the conditions of the poor in the the US or elsewhere – in fact conditions for the poor BOTH in the US and almost the entire world have improved dramatically over the past generation.

Yes, I will be ecstatic to contrast the conditions of the poor today with those of the middle class even the rich from the 50’s. Today’s US poor win hands down.

I do not grasp how you can get sucked into this idiocy that things have gone to hell over the past generation when too anyone who has been alive even for a few decades the enormous changes in REAL wealth are incredibly obvious.

I remember growing up in a middle class family in the 60’s and 70’s. I though things were good, but the tenants in my apartments have more real wealth than my family did then.

My comparisons to elsewhere are solely to highlight the ludicrous nature of these arguments. The economic distance between almost 99% of the world population and the poor in the US is as great as between the poor in the US and the uber rich you rant about.

If you can steal from 1% of the US to benefit the 99%, then you can steal from 1% of the world to benefit the 99% worldwide. There is no moral difference.

Nor am I talking about Rwanda or SubSaharan Africa. The poor in the US enjoy a far higher standard of living than very nearly 99% of the world. Not just Rwanda. In terms of actual wealth – cars, dishwashers, apartment size, TV’s the poor in the US have more than the middle class in much of Europe.

I have not discussed doctors, lawyers and the other afluent professionals in out society. Though I would note that Doctors, Lawyers and those making 250,000 a year or more – the reasonably well of but certainly not your evil rich, make up the 2%. i.e. 98% of us make less. They also pay more than 45% of all taxes. Bring it down to 200K and you have only 3%, 16% of households earn more than 100K.

One of the problems with this entire meme is that all of you fail to grasp that YOU ARE THE RICH. Maybe not the uber Rich, but certainly well off. In terms of the world fantastically well off.

The foundations for the wealth created by the free market is what created the Middle class, and it was before this country was formed

While there were degrees of poverty, there was nothing in the way of a middle class and no class mobility except downward prior to the evolution of free markets.

Our system did not reward middle class virtues, it created the middle class and those virtues, and provided the means to acheive not just them, but real wealth.

Dave has a fixation that the “poor” rich are so miserable and envied by 99% of Americans, with the government running after them to tax them into poverty….

Dave says: “If you spent a dollar ever minute of your life from birth to death, you could not spend $50M in your lifetime. Warren Buffet could not spend all his money if he started at birth and spent a $1 every second. You just can not possibly consume that much wealth.”

The “poor” rich cannot even consume what they put in their banks… tsk, tsk, tsk…

Dave, I am not talking about how much the rich can consume, I am talking about how much wealth they can amass, hold, control and manipulate to keep the gap between poor and them as big as possible, and portray themselves as “successful”.

If the whole country does not prosper but only a few, then the GDP of $16T, it is actually wrong. The GDP is bullshit, WHAT, exactly, are the people in the US paying something in the range of 16 trillion dollars per year? GDP TREATS CRIME, DIVORCE AND NATURAL DISASTERS AS ECONOMIC GAIN.

It is also idiotic to compare GDP between countries. So who’s richer? the one that buys one egg for 100$, or someone that buys 5 eggs for 5$ ? By the measure of the GDP, someone who bought one egg for 100$ is richer and wealthier. You know perfectly well that in fact, the man with 5 eggs paid 1$ each is much richer (and also much happier).

A rich asshole A is buying at one billion dollars an anus scratcher from another rich asshole B. The rich asshole B buys from the rich asshole A a testicle holder for one billion. Congratulation! your country GDP has increased 2 billions!

You still do nto get it. Wealth is what you can consume. If you are unable to consume it, then it is only money. And if you have lots of money – more than you can possibly ever spend, then the rest is invested and the primary benefit is to others.

Even accepting the idiocy that invested money does not benefit others – and all you have to do is look arround right now to see how important investment is, so long as the rich did not steal their money from you – why do you care ?

I am not the one fixated on the “poor rich”. You are. Accepting as true almost every evil claim you can make about the rich – they are still not the root of any of our problems.
And that is accepting a huge number of obviously false presumptions.

It is extremely rare that one can cede almost the entire argument to the other side – and still prove them wrong. This is one of those instances.

Lets presume that tomorow the FED increased the money supply by a factor of 100, and all of the new money went to Warren Buffet.

Almost nothing would change. A gallon of Gas would still cost $3.50. And even if there was an adjustment in prices – it would still cost the same amount of your labor.

MONEY IS NOT WEALTH.

Income inequality could be 1000 times what it is currently with no effect of consequence on you, or the poor.

The only thing that matters is how much do you have to produce in order to get the WEALTH that you need and want.

You have also bought alot of horsepucky from somewhere.

GDP only measures what we produce. If you chose to destroy it that is your business.
It is uneffected by your destructive choices. The “P” in GDP stands for production.

There are some serious problems with GDP – if The Chinese sell Walmart a lightbulb for $0.10 and Walmart sells it in the US for $1.00. GDP increase by $0.00, and the trade deficit increases by $1.00 despite the fact that only $0.10 went back to china.

But all that is just idiocy about the way we measure GDP. It does not alter that our wealth is what we have produced and GDP is the best available measure of it.

GDP does not measure what we Spent. It measures what we produced.
We did not necescarily produce what we wanted or needed – we produced what others will buy – so that we can then buy what we want or need.

If the Mexicans can produce brooms and garbage cans for 1/4 what we can, but can not produce airplanes, it makes sense for us to produce expensive airplanes and sell them in order to buy garbage cans and all the things the rest of the world produces more cheaply. A country that wishes to have a high standard of living produces those goods that command a very high price and require great skill to create, and buys the stuff that requires little or no skill elsewhere.

One of the primary purposes of GDP si to compare the relative productivity of different countries. Our Standard of living is nearly the highest in the world BECAUSE we have nearly the highest per capita GDP.

And in general most goods – eggs, cars, energy, … are also less expensive in the US, and developed countries.

But even accepting you warped egg argument, If 5 eggs cost a $1 in say Biafra, and eggs cost $5 each in the US. The average Biafran has to work two hours to be able to buy 5 eggs, and the average american would have to work 1 hour to buy 5 eggs.

In the real world Eggs cost about twice as much in the US as say india.
But average purchasing power – the amount of goods and services on the whole that a dollar in the US buys is nearly 3 times that of India – and that is before factoring in the fact that Indians have far lower income.

GDP does nto increase based on what you BUY, but based on what you produce.

And yes if we can produce anus scratchers and sell them to the rest of the world for $1B each we will all be quite well off. But the fact is that the price of things is set buy the market not whim, and there do not happen to be alot of rich Billionaires willing to buy $1B anus scratchers. And Walmart alone sold a bit less than 1/20th of our entire GDP last year – and I do not thing there were any $1B anus scratchers.
The fast food market accounts for another 1/20th. Buy the time you get done all the ordinary goods that average people produce or consume you will have accounted for nearly all of GDP.

The rich are an inconsequential portion of the market place.
They consume a tiny percentage of the goods we produce.

The only effect of consequence they have on GDP is that they supply part (most capitol actually comes from the investments of ordinary people) of the investment capitol that makes that production possible.

Brooks is far from my favorite journalist. He is the New York Times token conservative – except that he is really just left of center, but that is as far right as the Grey Lady can see.

Regardless in this particular editorial he makes some very valid points.
Further I try hard to find links citations and papers that are from moderate or left leaning organizations to make my arguments. Because maybe your eyes won’t glaze over went the world bank (which is essentially a government charity not a bank), or Christine Romer make my point, maybe you will pay attention.

“Production” means absolutely nothing. It is a word like “opportunity” as in “He got the opportunity to get gang assraped”. The problem with the rich is not that they got a lot of money they cannot consume, the problem is that they don’t feel like they want to invest unless they feel that their position may be in danger.

You say: “GDP does not increase based on what you BUY, but based on what you produce” And you’re ignorant.
Measuring the total expenditure of money used to buy things is a way of measuring production. This is known as the expenditure method of calculating GDP.

You say: “Even accepting the idiocy that invested money does not benefit others”. This is not idiocy, it is just that you’re blind:

There are at least three instances when “un-consumable” money are still “wealth” because others cannot benefit from the money:
1. Holding money so it cannot be used by competitors and usurp the gained “successful” position. Just don’t invest the profits, for you have more than enough.
2. The money is circulated between “anus scratches” and “testicle holders” so it is used just for a few “successful” investors. Buying “outside” the circle may create others more successful than them.
3. Profit money are used to destroy competitors. For example: after a big rise in gasoline price, people are going to invest in electric cars. The oil then “plunge” the prices and people come back to gasoline cars leaving electric car investors in the dump.

You say: “But even accepting you warped egg argument, If 5 eggs cost a $1 in say Biafra, and eggs cost $5 each in the US. The average Biafran has to work two hours to be able to buy 5 eggs, and the average american would have to work 1 hour to buy 5 eggs.”
The “average american” does not work you dumb-wit. The corporations buy cheap from Biafrans and sell high to unemployed american, for ‘average americans” are “richer” than 200 years ago…

How is it that you expect all those young, poor black males with no highschool degree to get a job if no one invests ?

Held money is not wealth. And absent stuffing it in a mattress or burning it, there is very little real “holding of money” in the modern world. Money is either invested at low risk or higher risk. The economy we currently have is the one you get when those with money are risk averse.

Do you honestly beleive your “anus scratcher” and “testicle holder” analogy ?
Regardless, the rich are a fairly small market and always have been.

And Rick ranted about birthers and 911 truthers.
Aside from being the product of having watched too many episodes of dallas rather than reality, even accepting your falacious third scenario at face value, things are still produced and consumed, money is not “held”, values just change.
Does an electric car get you where you wish to go ? If it does not the price of oil is irrelevant. If it does then I do nto understand the problem.
Are some investments and some purchases better than others – certainly.
Do poor people sometimes make poor choices ? Absolutely – but recent news shoudl assure you that rich people make bad choices too.

Unemployment is 8% not 80%. The average american works. and the median income for the households of high school dropouts is $22K/year. Which is also the approximate income of the lowest quintile – the “poor”. And it still buys alot more $5 eggs than even the median income in Biafra.

This is not some twisted game of semanitics. Production is not a vague term, it is a broad term. It is anything that is exchanged that any human needs or wants sufficiently to trade something of value.

The transition from consumption to investment starts with anyone with sufficient income to save – for whatever reason, retirement, a home, school, …. The greater your income the larger the potion is directed to investment rather than consumption.
Warren Buffet can not possibly ever consume his riches.

The “expenditure method” still attempts to measure production. If you do nto produce you can not consume – at least not for very long.

For reference according to the BLS consumer spending of the top quintile – that is every family unit earning more than 91K/year was about 1/3 of all consumer spending.
Further on average they invested about 1/3 of their total income. The fourth quintile invested about 20% of their income, and the other three quintiles invested an insignificant portion of their income.

The point is whatever moral standard you have that you believe allows you to steal from those in this country with more than you, allows the 99% of the rest of the world to take from you whatever you might have.

The left claims the mantel of moral superiority, but it does not fit.
The left is amoral because they fail to grasp that absent freedom morality does not exist.
And they are immoral because their values are inconsistent without any rational basis – essentially they make up morality as they go along.

Our position as the top 1% of the world is primarily an accident of birth rather than because of any personal merit.

We inherited our position at the pinnacle of the world.
Conversely only 1-10 percent of the uber-rich int he US inheritted their riches.

Your basis to be at the pinacle of the worlds riches, has a weaker foundation than that of the uber rich to be at the pinnacle of this nation

I am not defending the uber-rich. I am trying to demonstrate that this anger at some evil others is immoral.

If we punish the rich for the crime of succeeding, we will move on to other victims.

BTW membership in the top 1% in the US would cover most doctors and lawyers as well as almost every family with two full time professional wage earners. While these are certainly people who are doing well, they are not what most of us think of when we contemplate robber barons

Dave wrote:
“I am not defending the uber-rich. I am trying to demonstrate that this anger at some evil others is immoral.
If we punish the rich for the crime of succeeding, we will move on to other victims.”

I am not angry at the “success” of the uber-rich, nor I want to punish them for “succeeding”, I just want to find a way to make happy as many people as possible, not by telling them to be happy with the questionable “success” of the 1%.

If the uber-rich cannot consume everything they have, but still have control over the economy, what would cost them to make an effort to create a society that would have 50% upper middle class, 25% middle class, and 25% lower middle class? Would that make them feel “poor”?

I do not believe in fairness as a core value. There is no standard for fairness. Noting that we are the 1% relative to the rest of the world should make the problems of fairness as a standard.

I have no interest beyond theoretical in discussing how little if any government we actually need.

What I do know – both theortically, as well as from real world practical evidence is that TOTAL(federal, state, and local in our case) government beyond 15% is on net increasingly harmful – using the conditions of the least well off as the measure.

Government has only one valid purpose, to prevent us from infringing on the freedom of others. That is the only task that it is arguably good at, or that it arguably does batter then no government at all.

I did not say that the government can do that, i said that the uber-rich could do that. Would they’ll feel “poor” by doing that?
If the uber-rich and the rich will not have their life purpose to amass wealth which is a nonsense as underlined by Dave (they cannot consume that wealth), why instead of amassing wealth they would focus in creating a society 50% upper middle class, 25% middle class and 25% lower middle class? Of course the percentages are dynamic not written in stone or imposed.

First you can not create the hypothetical society you imagined – because we define “upper” as the top 20%, upper middle as the next 20% middle as the middle 20%, …
You can never have 50% in something that is defined to be 20%.

What you can have is an increase in the amount of wealth (but not the percentage of total wealth) that those in each group have.

And the free market has done exactly that – everywhere that it has even been given as little as lip service, throughout any period atleast a decade long throughout all of the past approx. three centuries during which there has been sufficient freedom for 99% of society to actually have an approximation of free markets.

At the same time no other system has come close. The tepid democratic Socialism at is very best has produced less income inequality at the expense of substantially less total, median and average wealth. It does approximate your “ideal” because the difference between each of the classes is smaller. but it does so by leaving everyone poorer than they would have been otherwise – and this is the BEST that has been acheived. The more aggressively socialism has been pursued the worse off people subject to it are. Socialism has a very hard time maintaining the same standard of living, much less actually improving the standard of living – and even that relies on essentially importing the advances of the rest of the world.

Dave wrote: “First you can not create the hypothetical society you imagined – because we define “upper” as the top 20%, upper middle as the next 20% middle as the middle 20%, …”

See? It is possible to get from a feudal system where society was 1% monarchs and their ass kissers nobles, a few percents slave masters and the rest poor and slaves, to a capitalist system that maybe was 20%, 20%, 20%…

There are several questionable and contradictory premises being argued here.

If wealth (real wealth not money) is not the best available measure of whatever it is that you are trying to impose – then why are you so fixated on it ?

If you can figure out a way to improve whatever it is that you think is the Gross National Happiness quotient, without stealing from anyone, and without infringing on any freedom except our freedom to do violence to others, then more power too you.

But that is not your argument.
No matter how you try to phrase it the argument is that for the greater good I (or I in the form of the majority) have the right to do things that would be immoral if done as an individual, because I claim they are for the greater good.

This is no less despotism than the tryany of kings and pharohs.

What I can not understand is that you do not grasp that not only doesn’t it work, but it can not work

You can not achieve moral ends by immoral means – no matter how appealing.

Madison noted:
“If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”

Why do you expect unlimited government to behave better than individuals ?
I hear constant rants about the bad behavior of the rich and powerful, of powerful corporations – why do expect government to behave better ?

We have 6 millenia of the history of government – where is the powerful government that did not enslave its people and its neighbors ?

You believe that men are too evil to manage their own affairs. Too evil to be trusted with wealth, too evil to be trusted with corporate power, but that they govern as angels ?

If people are as deeply flawed as you believe, government must fail – and it must be worse than all the private evils you rail about.

If they are not, then little government is necessary, and there is certainly no justification to act immorally for some greater good.

Dave, what you don’t grasp is that successful businesses can if fact be stealing, but in your overzealous defender of the “free market”, you accept stealing because it is done in a “free” country.

If I have a “successful” monopolist corporation and make way too much wealth, beyond any imagined possibility to consume it, then I consider it stealing. I steal the possibility of a society to have a bigger number of citizens having a better life. Don’t give me that crap that the poor should be happy because they have a cheaper computer, a pair of “name brand” sneakers, or that they can “afford” a car that actually you have to buy because public transport in the US is as not existent.

As a monopolist corporation I can make an entire country to depend on oil, and make it looks like it is the people fault that they are “addicted” to oil. European countries relies less and less on conventional energy, but doing that in the US some will consider it stealing from american oil investors.

Investing in oil may make some investors rich because the US investors in alternate energy are in the dump when oil is a monopoly and manipulated against any other kind of “unreliable” energy. So, actually there is a stealing made by “successful” corporations of wealth creation possibilities in other fields.

Again, it is bullshit that a “successful” corporation will use the “un-consumable” wealth to rise the overall economy. In your narrow view you say:”Hey! Look at that very “successful” corporation that raised the GDP with its “production”.” It doesn’t matter that most of people do not afford to buy this “production”, it will be circulated among the rich and still the GDP will be high and the economy OK! and it is a sin to be unhappy and mad at “successful””

That some people are theives is not a justification for institutional theft by government. If you can demonstrate that a business has stolen from you – I will be happy to punish the theives.

But It does not sound like you are talking about real theft, but envy masquerading as a claim of theft.

Business profits fall into a very narrow range and correspond primarily to risk. On rare occasions businesses reap a windfall, but it very quickly evens out.

If you expect a decent return on your IRA and pension – then you had better expect that those businesses that you are invested in are also profitable.

In the end only people profit. Businesses – even corporations are owned by people – mostly people like you and I.

Please name any monopoly that has existed without government support.

Do I really need to address the stupidity of european energy policies ?
Spain has bankrupted itself on alternate energy.
Europeans play idiotic games with each other pretending to favor green energy. It is not oil companies that have made fossil fuels in europe incredibly expensive, not oil companies that have made so called green energy ridiculously expensive.

If you think oil companies are egregiously profitable – then buy oil company stock and you can share in the profits.

“The purpose of production is consumption” – Adam smith.

Any business that produces something that has no market – produces nothing. Remember Wealth is what we want and what we need. If we neither want it or need it, then it is not wealth and no one will buy it.

I have specifically NOT argued that businesses use “unconsumable” wealth to do anything. Again MONEY IS NOT WEALTH.
I have argued that as one becomes richer that one converts a smaller and smaller portion of ones money into actual wealth. the rest becomes investment. This is not only true but the left rails about it. It is why the rich get richer, it is why the left tries to pretend that it is acceptable to steal the portion of money that the rich do not consume. It is why just about every half way credible self help wealth scheme involves cutting your expenses and saving and investing.

I have already given you the government figures that demonstrate that less than 1/3 of all consumption takes place in the top 20% (I think that was families earning over 90K.year). That means that 2/3 of all consumption occurs in the bottom 80%. Repeating this claim that GDP is driven up by billionaires trading among themselves does not make it so.

I do not recall using the world sin.
And you are free to be happy or unhappy about whatever you please.
What you are not free to do is to demand theft from anyone – rich or poor, just because you are unhappy.

Dave: Denmark and a few other Scandinavian nations topped the list of “happiest countries” in a recent survey that measured “life satisfaction,” disposable income and other criteria that contribute to a good life. Granted that it’s hard to collect objective data on such a subjective issue as happiness, but the trend was unmmistakable: those northern European countries with mildly socialistic governments (neither free-market nor excessively intrusive) came out on top.

I don’t think anyone could characterize the residents of Denmark, Norway, Sweden and Finland as oppressed; they simply trade the extreme risks and rewards of the free market for a lifetime of middle-class comfort and security. Nobody incurs half a lifetime of debt for daring to attend college; nobody faces financial ruin for getting sick. In short, nobody gets thrown to the wolves the way they do in a free-market economy.

And what have the Scandinavians surrendered? I don’t hear of any restrictions on speech or assembly; their leaders don’t push them into long, unwinnable wars; they don’t ruin their health by working 14-hour days or desperately searching for nonexistent jobs. They sacrifice a chunk of income off the top but receive much in return. Maybe that system wouldn’t play in America (we’re all descended from opportunists, if you think about it), but I don’t think anyone is justified in calling it evil.

The scandanavian countries are the ONLY outlier in the studies of government size vs. GDP.

And deeper analysis reveals they are nto really outliers.

First they are very strong monocultures. Distinct from much of the world they have commonality fo heritage, ethnicity, religion and values that are unparalled in the rest of the World. The US as an example is the most diverse culture in the world. We are the least like scandanavia culturally that is possible.

If it is possible to sustain socialist policies – scandanavia would be the place most likely to do so.

Next, while they have heavy taxes – though not so heavy as we represent, and a deep social safety network, they actually have far lower government regulatory burdens than we do – essentially aside from high tax rates and broad and deep social safety nets, they are extremely free market. Again this is not like the US or much of the rest of the world.

Finally, the data for scandanavia follows exactly the same trend line of declining GDP with increases in government spending. The slope of the curve is exactly the same, but the Y intercept is different.

Nicely done, Dave. You managed to touch on every cliche – suicide, monocultures – in the argument regarding the unlikelihood of the Scandinavian model working in the “special” United States – specially bad, that is.

Rob; it is not the US that is so special – it is Scandanavia.
Cliche means overused – not false.
I have a friend who lives in Sweden – he does better there than he did here.
But despite much that the swedes get from their government for free, the country does not seem that appealing to me.

And to add to your bundle of Cliches, Scandanvia has far more restrictive immigration than we do,

We are a nation of immigrants. as much as 5% of our current population may be “illegal” immigrants. A much larger percentage are first or second generation immigrants – and not typically wealthy immigrants, yet 300M people have a standard of living equal to or superior to nations with negligible immigration – and certainly not 12+M illegal immigrants.

Regardless, if you wish to argue the scandanavian model – then argue the actual scandanavian model, Not the greek, spanish, or italian model, dressed up as if it is what Scandanavia is using.

Are you prepared to end immigration – or to require immigrants to post bonds equal to several years worth of income inorder to enter the country ?

Are you prepared to scale back regulation on business ?

Are you prepared to impose a set of norms that morally and sometimes legally punishes the unproductive ?

You dont get to pick and chose the things you think you like out of the scandanavian system and presume – contrary to evidence that you can cherry pick and get something that works as well.

Regarding immigration, glad you asked. I’d end it, for 30 years. Why that long? To give the current immigrants time to assimilate. Furthermore, I would declare an amnesty for current illegal immigrants, then seal the border, and MEAN IT. Last but not least, no more H1B or L series visa immigrants. We have all the engineers we need; I should know, I spent the better part of 20 years working in Silicon Valley. Immigration is used as a bludgeon against the working and middle class, keeping wages and benefits flat. There are no jobs Americans won’t do except as *currently constituted.* I myself will not pick strawberries under the current abysmal conditions. Inject a little dignity – such as allowances for middle-aged, former white collar folks – and I’d do the work in a heart beat. So would many other men and women. What we WON’T do is put up with the bullshit that illegal and other immigrants tolerate.

If you want more “cliches” I would also note that it is not accidental that milder forms of the progressive eugenics that died in the US and most the world when confronted with the holocaust continued in Scandanavia in some instances until the early eighties.

If you want to set up as ideal a country where forced abortions and sterilizations are acceptable government policy – be my guest.

As to various happiness quotients – in general I find them dubious.
And beyond that you are still presuming a right to force others to be happy – by whatever standard of happiness it is that you are using to measure.

My language that Wealth is “what we need and want” is very deliberate – it is also accurate. Whether our individual decisions with respect to our needs and wants lead to happiness – I do not know, you have to decide that for yourself. But given that wealth is what we need and want – and that is essentially a tautology, GDP, and standard of living most accurately measure the extent to which we succeed in getting what we need and want. And I would note that the GDP/PPP for much of Scandanavia is very high.

So maybe they are not so happy because they have this huge government, but because their lite regulatory touch allows them to be highly productive.

Regardless you have to be extremely careful comparing purported european social democracies to the US or the rest of the world.

They are vastly different culturaly – and they are often far less socialist in practice than in name. As an example most european countries provide some sort of national healthcare. And many have lower healthcare costs than the US – ignoring the fact that as with defence we are subsidizing world healthcare, few european systems are single payer fully paid systems. While they often mandate insurance, the insurance is typically private and often less regulated than ours. Further they grasp the bad incentives problems that we ignore and typically have high copays or deductibles or some other form of limiting healthcare consumption by requiring patients to pay sufficient portion of the cost to compel than to ration their own use.

This is not universally true – there are vast policy differences between southern and northern europe.

There are alot of ways that Scandanavia is more socialist than we are – and alot of ways they are more free market.

If you really want to sucessfully adopt the scandanavian approach, you can go peicemeal – or you end up as greece, italy, or spain.

And you have to explain how it is going to work in a vastly different cultural context.

I would also note that Europe has not been blind to the fact that those nations with smaller government, lighter regulatory burdens and less broad and deep social safety nets have faired far worse over the long run. Much of europe has been working hard at being less socialistic – and though it has a long way to go the differences between the US and many european nations as we pass headed in the opposite directions is not that great.

The relative success and possible happiness of Scandanavians does not alter the immorality of constraining freedom or of theft.

Everybody else does it, or it worked for somebody else is rationalization it does not alter whether something is right or wrong.

TNM is always ready to lob moral grenades at everyone else.
The undercurrent of moral opprobrium directed those who think differently or the rich, or business is thick enough here to walk on.

I have deliberately chosen to go on the moral offensive – the fundimental problems libertarians have always had with the left is that progressivism is intrinsically the ends justifies the means. I have repeatedly argued that progressive means not only do not actually accomplish the ends they seek, but often are antithetical to them

But even if progressivism worked – it is inherently immoral.
I do not think that Scandanavia is nearly so progressive or socialist as you believe – but even if it were miraculously both socialist and successful – that would not make it moral – the ends do not justify the means.

The scandanavian monoculture – the significant pressures for conformity matter.
That those norms are shared by most scandanivians, that an overwhelming majority essentially impose their will by force on a smaller minority than elsewhere – does not make that theft of freedom more moral.

Dave: I’m not sure I understand why it’s more immoral to restrict the winner-take-all gains of our plutocrats than it is to let the downsized, downwardly mobile victims of the corporatist system lose their jobs, their homes and their dignity. Weigh the one against the other; there’s really no comparison: the super-rich need to be reined in as they make obscene sums of money by gaming the system and cutting corporate jobs left and right. Meanwhile, the dying middle class needs to be bolstered. The “job creators” in the corporate world aren’t bolstering them right now; in fact, they’re destroying them. That’s why I keep harping on the need for government job creation.

I cited Scandinavia because it seems to be the happiest region among the developed nations; the form of government prevalent there is only a happy coincidence, but it’s enough to make you think. Why does that mild form of socialism lead to happiness? You mentioned the ethnically homogeneous nature of the Scandinavian countries, which used to be the case until the Muslim incursions of the past few decades. (Remember Anders Breivik, the angry Norwegian gunman?) Denmark, the very happiest of the happy nations, has a significant Muslim presence now. So we can’t really rely on the old monoculture theory.

I do believe that most Scandinavians share a core set of beliefs and habits that promote the success of their system: there are virtually no slackers among them, but at the same time there’s almost a cultural taboo against showy accumulations of wealth. They work hard but not at the expense of a good, well-balanced life. In other words, they didn’t have to be dragged kicking and screaming toward a system that values security above risk. Most Americans would have to be dragged, which is why I don’t think it would work here.

I’m not a socialist, believe it or not, and we actually agree on many of our values. Where we differ is that you routinely trust capitalists more than you trust government officials, while I’ve come to deeply distrust capitalists (at least the big-time variety who run the known universe) even more than I already distrust government officials.

By the way, I neglected to point out that the happiness survey didn’t include Third World nations. I seem to remember from previous surveys that the happiest countries actually tended to cluster around the equator — South American and sub-Saharan African nations scored at or near the top, if you can believe it. This survey obviously didn’t include discretionary income as a happiness factor, which gives the lie to the notion that material wealth increases happiness.

These people have no expectation of wealth, so as long as they earn enough to eat and shelter their families, they can enjoy life and savor its simple pleasures. In America we’re constantly expecting an upward trajectory, comparing ourselves with the more fortunate, and hitting a solid brick wall of frustration when the syetem fails to reward our efforts. It’s not a salubrious way to live. We’re knocking our head against the wall so a few superachievers can enjoy the fruits.

One of the most wonderful things about the era that we live in is that information is readily available to examine any claim.

I did not pick Sweden – you did.

The information of Swedish taxes came from data published by the Swedish government.

The information of standard of living, GDP came mostly from wikipedia.

Sweden is generally regarded to have the highest taxes in the world. Their total taxation is 53% of GDP – that is no more than 10% higher than ours, and more likely only a few percent higher than ours.

28% of Swedish taxes come from consumption taxes – generally recognized as the most regressive form of taxation.

Sweden has low taxes on capitol. Capitol gains and corporate taxes are about 5% of GDP and about 11% of Swedens total tax revenue.

The swedes have high rates of savings – total swedish savings are 105% of GDP.

Sweden has no inheritance taxes and no wealth taxes.

The average (not marginal) tax rate paid by the lowest income group is 14%, this is UP from 10% paid in 1980, the average tax rate paid by the highest income group is 38%, the highest marginal tax rate is 57%
This is DOWN for 85% in 1980.

Sweden has a high incidence of tax fraud at all levels. It is estimated that more than 105 of their labor market is off record. There is also evidence that a significant amount of business tax avoidance.

61% of swedes still think there taxes are way too high.

More than half of all Swedish Billionaires live abroad

The US has the smallest shadow economy in the world at 8.6% o GDP – and that includes approximately 12 million illegal aliens.

The GDP/PPP percapita (GDP adjusted for local purchasing power) of the US is 6th in the world in 2011 follow Qatar, luxemborg, singapore, norway, and brunei. Sweden is 13th.

The US is second in the world behind Luxemborg for purchasing power adjusted household median income. Sweden is 12th.

From 1850 through 1950 Sweden’s growth in productivity was the fastest in the world. and made them the fourth richest OECD country by 1970. Taxes increased to as high as 85% from 1950 through 1980 and sweden declined to 16th place – the most dramatic drop of any affluent country in history.

By 1980 Sweden basically did not work as a country. The disincentives to work were substantial.

Sweden has had a center right government since the 1980s that has gradually been whittling down its welfare state and tax burdens and as a result its economic position has risen back to 8th in the OECD – aided by the fact that while Sweden has been moving away from a broad high tax welfare state with guaranteed benefits, much of the rest of europe has been moving towards it.

Is extremely important. It is one of Adam Smiths most significant observations.

Not well hidden beneath statements like “the purpose of production is consumption”,
is the understanding that in a free market, what is produced is what we need and what we desire – bizarre remarks about $1B anal scratchers aside.

You can argue that what humans want and what they should want are at odds.
It is entirely possible that we may be happier under some different scheme.
But the free market does a better job of providing us with what we want then any other system. That is not only true, but it must be true, because it is the only system in which we are free to decide for ourselves, the only system that forces us to prioritize those choices and the only system that leaves us free to decide for ourselves when to work harder and when we are satisfied.

The free market not only works in practice, but it is not actually possible on a theoretical basis to design a different system that would better maximize the net outcome for everyone. The argument of the left must always be, we will make society as a whole worse off in order to improve things for some.

When we talk about wealth, production, we may not be talking about what we need to be happy, but we are talking about what we beleive we need to be happy.

When you are arguing against that you are not only making an immoral argument to steal from others, but you are also arguing that people are not able to and should not be allowed to decide for themselves what makes them happy. Which is even more immoral.

It has been my experience that people who are seeking to improve their lives and those of their children – regardless of how poor they might be, tend to be happier, and those that are certain that others owe them something, that but for some intrinsic unfairness they would be better off are generally unhappy.

If our objective is to improve Gross National Happiness, free people making free choices to improve their own circumstance rather than whining that fairness entitles them to better and that someone else should force some arbitrary standard of fairness seems a more successful approach.

Where did you, your parents, their parents come from. Did someone stop them at the gate saying no more of your kind ? This land is only for native americans, or pilgrims or virginia colonists ? How well did this
Did discrimination against chinese, italian, swedish, …. workers and immigrants raise the US standard of living ?

Unless your personal circumstances are such that you actually need to pick strawberries to survive. I would not expect you to.

At the same time if that is what is necessary for your survival, then you should be greatful to the farmer that provides you with that abysmal undignified job with horrible working conditions out under the sun. I can assure you that the illegal immigrants doing it are grateful for it. The universe owes you no right of survival much less dignity. But if circumstances are bad enough, and you wish to chose dignity over life – you are free to do so. But the fact that you might have to make that choice is not the fault of the person who offers you the opportunity to survive.

The only thing the universe entitles you to is freedom. Not a dignity not even survival.

Should we ban babies from pooping so that parents do not have to experience the indignity of cleaning their buts ?

You should be using the skills and education that you have in the most productive way possible. That will produce for you and everyone else the best possible outcome.

That is the purpose of “the division of labor” and the reason that autarky returns us all to the caves.

i work in embedded systems, i am competing with the same H1B workers you are so desperately afraid of, as well as outsourcing to India or china, or ..

Bring them on. There is enough work for all of us – and then some. The more they succeed the more is needed.

There is NO LIMIT to the number of engineers (or laborers) we need. So long as people want more we can produce more.

If you do not like the job you have or you are tired of competing with Indian H1B workers, create your own job. If you are truly worth more than that H1B worker then you can produce the next ipod, or just a better fuel sensor. If creativity is not your thing – get together with someone else. Gengis Kahn, King Arthur, Andrew Carnegie, Hewlett and Packard, Jobs, Llyod Blankenfein, John Dejoria are all examples of people who rose from nothing often in their garage, there are myriads more.

Why are you entitled to a specific job rather than some indian H1B holder ?
Is your race or the accident that your particular combination of genes occured on US soil something that makes you superior or entitled to something others are not ?

You are happy to demand that the us 1% give what they have to the US 99%.
Why is that limited by invisible national borders ?

While were at it, why not reserve those high quality jobs solely for straight white men ?

You rant about business monopoly – while demanding one for yourself.

Georgia and Alabama are trying to get those ordinary americans to do the jobs that were formerly done by illegal immigrants. It is not working.

The working conditions are driven by the market, not individual concepts of dignity.
The market – you and I are willing to pay so much for a box of strawberries.
If the price goes too high we buy elsewhere – or we do not eat strawberries.
Farmers in Georgia and Alabma are struggling to find the right conditions to motivate unemployed georgians to pick strawberries. At wages much higher than were paid to illegal immigrants they get few takers, and those are far less productive, and generally quit after a day or two.

Assume the worst about the farmers who higher illegal immigrants.
They still make money for themselves. Provide you with cheap strawberries,
Provide jobs that americans will not do to people who are grateful for them and doing far batter than they would otherwise.
It is a win, win, win situation.

My role as a landlord has given me the dignified job of fixing and cleaning overflowed toilets, and uncollected garbage and busted sewer lines. I have not allowed my dignity to get in the way of doing whatever must be done.

You decide the pay that engineers and strawberry pickers get, when you decide how much you will pay for iPods and strawberries.

Farmers in Georgia are not going to transform picking strawberries into the dignified white collar job you want – because they can only chose the price they are willing to sell at – you chose the price you are willing to buy for.
Since the buying price is insufficient the farmers will have to adapt.
Absent illegal immigrants willing to work productively for low wages, they will move where the economic climate is better, switch to other crops, or automate.

You are afraid of foreign H1B workers, every unskilled labor job in the world competes against machines. US industrial production is greater than ever. But factory employment is a fraction of what it was. Your demand for goods at ever cheaper prices requires trading unskilled labor for machines and fewer highly skilled jobs.

If you want more factory jobs – eliminate the minimum wage. They will be dangerous crappy, no skill, low wage jobs. They will be jobs you and I would not do unless we were desperate. But they will be jobs, and they will come with the dignity of having earned ones living, and they will teach the skills necessary to get slightly better jobs later.

Who are the poor ? An enormous percentage of the bottom quintile in the US are immigrants or the children of immigrants.
In 2008 8% of all babies born in the US were the children of illegal immigrants.
25% of the population under 18 in the US are immigrants or the children of immigrants.

in 2010 almost 40M Americans were legal foreign immigrants.
With each passing generation this country is absorbing a number of mostly poor foriegn immigrants almost equal to the size of the entire lowest quintile ?

Yet we still have one of the highest and growing standards of living in the world.

There are myriads of fallacies inherent in the liberal meme of stagnant classes, and declining conditions for the poor.

But one of the single easiest refutations is that the sum of extremely poor legal and illegal immigrants during each generation exceed not just the poor, but the entire lowest quintile.

If the poor of a generation ago are still poor and we have added poor immigrants outnumbering the poor almost two to one, how is it that percent of poor is constant while their standard of living has increased ?

At the bare minimum upward class migration must have exceeded downward migration by 80% of the total number of immigrants just to preserve the status quo.
That is a net upward migration of 35M from lower to lower middle, 25M from lower middle to middle, 15M from middle to upper middle and 5M from upper middle to upper over 20-30 years.

This ignores the completely independent problem that new household formation which is high during good times and low during bad times creates the statistical appearance of decline but represents the willingness of young adults to be statistically poorer and on their own rather than part of the wealthier household of their parents.

Denmarks public debt is 11% of GDP and their budget is essentially balanced.
Sweden’s public debt is 35% o GDP and they are running a small surplus.
The US has public debt of 100% o GDP and is running a deficit of about 1/8 of GDP.

Some elements such as combatting inflation were specific to that time. Further contrary to popular oppinion Reagan started with a better foundation from Pres. Carter.
Volker was Carter’s head of the Federal Reserve and began the fiscal policies that ended the stagflation of the 70’s but also caused the recession that resulted in Reagan’s election. Carter must be credited with doing the right thing for the country despite it likely costing him re-election. Unlike the current President, Reagan did not spend his Presidency blaming his predecessor for the conditions he inherited.
Carter also started the process of reigning in the federal government.
Eliminating the Interstate Commerce commission, and deregulating truck and rail freight as well as the airlines.

Most of this same advice directly applies to whoever is elected on Nov. 4, 2012. Unfortunately, it does nto appear to be advice that either candidate will be offered much less heed.

Rick, I think that equating capitalism with evil and greed, or even assuming that the fruits of a free market economy are necessarily and, by definition, unfair, is wrong. And unfair, lol.

I know you well enough to know that this is not exactly what you think – although, Rob, I think it may be what YOU think – but, by lumping the entirety of the free market system into a bucket called “capitalistic evil” you ignore the fact that the vast majority of these evil fat cats started out as middle-class, or even poor, and somehow figured out a way to make a crapload of money. Most of them would consider their wealth to be hard-earned, through work, talent, luck and/or sacrifice. At some point, many of them have had to risk losing all or some of their wealth in order to become”obscenely” rich. They consider themselves unlike wealthy career politicians, who have figured out ways to game money from those who have earned it and used it not only to enrich their own lifestyle, but to perpetuate their power by redistribution.

I find it near impossible to trust in a government run by career politicians. They are not public servants, and they do not understand the free economy….or, if they do, they are threatened by it. I’ll trust an obscenely rich, but charitable fat cat any day over a statist.

Value is difficult to establish. The value of anything is different for each person.
But the free market does digest all of our inputs and comes up with a very good approximation of relative value based on all of our inputs. Like it or not, Leonardo DiCapria, The Scream, and Tiger Woods are all worth far more than i would personally pay.
And a hot fudge sunday at burger king is worth $1.00

We have and can not conceive of a similar means of establishing the relative rankings of “fairness”. Absent such a scheme we can not determine how to devote resources to improve fairness. We have no way of deciding what the appropriate level of resources to devote to combating racism as compared to breast cancer or bullying, or ….

There are numerous other flaws and fallacies in the luke warm liberalism that TNM offers as moderation, but the absolute impossibility of having a workable system with “fairness” at is core is the central failure of Rick’s form of moderation.

I am not trying to claim that “fairness” is evil, real unfettered free market capitalism is not perfect, it will cause harm bad things will happen, some destruction is necessary.

I will claim that elevating fairness to a core value will often produce evil results.

Though “merit” is a feature of free markets. It is extremely rare for someone to succeed, particularly to succeed greatly who really does not have a clue.

At the same time free markets are far from a meritocracy.

It is not that the people who succeed the greatest are the most deserving, but that regardless of the unfairness, inequity, ….the net result for everyone is not only better, but substantially better than any other system ever imagined.
The free market is so powerful at elevating everyones standard of living, that it greatly improves conditions in even places like China given the slightest toehold.

Priscilla: I don’t believe capitalism is evil or unfair — just the kind of unbridled, winner-take-all capitalism that we’ve been witnessing for the past couple of decades while the middle class founders. The kind of capitalism I like is devoted to creation: new products, new technologies, new jobs, long-term investment in promising companies. The kind of capitalism I detest is more involved with gaming the system: derivatives, shorting the market, downsizing to give shareholders the illusion that all is well. (I think that makes me a moderate, don’t you?) And believe me, I’m no more fond of corrupt politicians than you are.

The meme of the “evil rich” is pretty ludicrous.
It seems to depend on redefining evil as successful, or just having a different view than ones own. My values are not those of Arnal, or Dimon, but I do not try to frame their successes or failure as evil. Beyond Maddoff, I can not recall an actual crook among those we have chosen to vilify.

Lets accept most of the left’s argumets as fact.

Are the participants in the financial markets evil because they failed ?
Are the rich evil because they are rich ?
Are they evil because they want to keep what they have ?
Are they evil because they want more ?
Are wall street brokers evil because they received bonuses ?
I would like to be paid more and given an opportunity will seek more – am I evil ?
Is everyone who has ever asked for a raise evil ?

Making every mistake, or even every choice we do not like into evil, alters the way we think – in a very bad way. And worse it deprives us of the ability to see things that are really wrong. It enables us to do things that are evil, because we have confused morality with what we like and do not like.

Expecting a $1 million-plus bonus after helping shatter the economy of the free world in 2008 might not qualify as evil (though I think it just misses)… but it certainly reeks of hubris and a pathological sense of entitlement. What were those guys thinking??

“Why is it wrong to take the gains of the successful, and not wrong to allow people to lose their jobs ?”

That is a false equivalence.

It is wrong to steal. It does not become right because you dislike the person you are stealing from. It does not even become right if they acquired what they have in some bad way.

As to people loosing their jobs. If you wish to help – go ahead. But a job is not a right. Pay for the work you actually did is.

You have equated two things that have nothing to do with each other, and proposed that as a nation we steal from one to do something good for the other.

You freedom to chose to help any group does not permit you to steal from anyone else to do so.

I think helping children in orphanages in China is more important than helping comparatively well off people who have just lost their jobs in peoria.
Can I confiscate what you would have give to aide the jobless, and direct it to chinese orphans ?

Regardless, look at your own argument ! Where does it end ?
you have set yourself up as judge and jury. you have convicted and sentenced – not some of the rich for something they actually did, but all of them for something some of them might have done. We do not punish everyone for what one person has done.

Look at your language – money is now “obscene”.

Aside from providing direct employment please provide an example of an actual instance in which the government has successfully created jobs ?

I am not a Romney fan, but there are some excellent articles out their comparing Romney’s vulture capitolism, with Obama’s Public equity investment – hint the vultures have done far more good.

The evidence that government is absymal at this is all arround. Even you rant that so much of what government get does gets perverted by outside interests.

Of course it does. And so long as government tries to do anything that other people can profit from others will not only try, but they will succeed in bending government to their will.

I have given you lots of facts and figures with respect to Scandanavia.
But I do not pretend to really know their hearts and minds.

I do not actually know whether they are happier – but in truth neither do you.

I do know that they and most of those european countries that are in good shape, have spent the past three decades weaning themselves from the very system you are claiming they have proven works.

I also know that even when these nations mad what i (and apparently they) regard as poor choices with respect to who should pay for what and how big government should be, that they still managed their affairs fiscally responsibly.

I am not aware of a scandanavian country that has spent gobs of money it did not have and had no real prospect of ever being able to pay back.

We are closer to imposing a Greek style socialism than a scandanavian one.

85% of Sweden is Swede. Another 5% is Finish. No other single ethnic group makes up more than 1/2%.

Sweden is still a monoculture.

How is it that the Breivik killings are a demonstration that scandanavia is coping well with a miniscule change in their cultural makup ?

I should think Breivik would be my example that Scandanavia is a monoculture that fails as it becomes more diverse.

95% of norwegians are lutherans – again mono culture.

Sweden made a radical shift in the early eighties BECAUSE they found that their cradle to grave entitlements system HAD resulted in a nation of slackers.
Studies from the late seventies demonstrated that swedes outside of Sweden were twice as productive as those in Sweden. This resulted in continuing shift of the Swedish government away from the very system you are trying to sell.

How exactly is it that you plan on transforming the US into Scandanavia ?

A system where there is less risk taking will inevitably devolve into a monoculture.
It will have low income inequality.

Risk is inherent in progress. It is inseparable from the continuous increase in our standard of living.

Taking risks means occasionally failing. Failure is an essential part of the continuous improvement of the human condition.

What you see right now in the US is just a hint of how a risk averse diverse society functions.

You are upset that the rich are not investing – actually they are what they are not doing is taking risks.

Your remedy is to have government taking the risks necessary to create jobs and revive the economy.

Somewhere in your mind you grasp that risk is essential to recovery and growth.

There is absolutely nothing wrong with risk. We have problems when we insulate people from the consequences of bad risks.

Fannie and Freddie failed, in a real free market they would be gone and something else, something that has learned from their mistakes would have emerged to take their place.

Yet we bailed them out.

What is the lesson from this ?
The lesson is that their is no downside to risk taking.
This is called “Moral Hazard”

The same thing goes for The Banks and Auto Companies,
and all the government investments that have gone south.

If you want to know how to get rich today – do something the government will guarantee.
You will have no problem finding investors, you will personally make a fortune, and when you inevitably fail, government will cover all the losses.
Even in the unlikely event you succeed – you get to keep the profits.

I do not understand how you can live in the real world and trust government period, much less more than business.

If you trust government more than pretty much anything else – then you are very unusual.
While libertarians have always had a high degree of distrust for government, Since watergate the only time public trust of government exceeded 50% was briefly after 9/11, it is now between 20-25%.

Trust of government is below trust in business even among democrats.

Small business in particular have had public trust about 75% pretty much forever – a level government has never reached.

But ignoring polls, in the real world, are you more likely to be harmed by business or government ?

Most of the really bad things that could happen to me are outside the realm of either.
Most of the bad things that could happen are inherent to nature.

Business has little or no ability to take from me something that is actually mine and in most instances to do so, it must use government.

Government on the other hand constantly takes things from me and sometimes it gives some back, but always it takes whatever it wants and returns whatever it choses.

My greatest risk of serious harm ignoring natural events and crime is almost exclusively from government.

No business can take my life, my property or my freedom without my consent.

There are myriads of different “happiness surveys” with vastly different results.

If you really believe people living in near poverty near the equator tend to be happier – then you are free to join them. I don’t. but maybe you are right.

I stick to things that measure wealth because

WEALTH IS WHATEVER WE NEED AND WANT.

Maybe nearly the entire population is delusional and worrying about where you will get your next meal is more liberating than worrying about how your child will afford college.
But I doubt it.

in a related note – I have watched myriads of Scandinavian movies – some are excellent.
But based on their movies I would have to conclude that this is the most unhappy miserable, depressed culture on the planet. Thagt has to be taken with a grain of salt – I am not sure I would argue that the work of hollywood accurately depict the american psyche. Still one must question the meme of scandanavian bliss based on the near universality of relentlessly downbeat dark films they produce.

Ignoring that most but not all of the prominent an highly intelligent people mentioned were progressives, here we have a cause backed by the intellectual elite, politicians and supported by much of the populace, antithetical to freedom, both in trade and in life, that heavily influenced much of this nation, as well as the world, and would still be a powerful force but for the Nazi’s carrying it to its logical ends. Further, despite the distaste the Nazi’s created, the scandanavian governments that get idolized here continued these policies through the seventies.

Business does not and can not create this kind of evil.

History is replete with numerous examples of intellectual elites demanding government policies to impose a new world order based on some new insite they have uncovered.

I am unaware of a single instances in which any of these have not eventually proven both false and destructive.

As Milton Friedman repeatedly demonstrated, in free markets private discrimination is counterproductive and dies on its own.

If I will not buy from, sell to, or employ someone based on race, gender, orientation or any other reasons irrelevant to the actual exchange being contemplated, I harm myself. I deprive myself of a purchase, a sale, or a capable employee and someone else not sharing my prejudice will automatically come along and gain advantage from my bad choice. Every poor economic decision creates an opening for others.

Sustained discrimination does not take place without government support.

While free people can not be compelled to make good choices, they can not be forced to make bad ones.
Only government has the power to compel us all to go in the same direction.

I do not generally like Thomas Friedman and am judging “Why nations fail” from his summary of it. But much of this is right.

What is wrong is the failure to grasp that political institutions fail when they expand power past basic rule of law, property rights and liberty. Ignoring the fallacies in modern claims of economic inequality, every nation emerged from real conditions of inequality far greater than the present. It is not the existence of inequality that poses the problem it is the ability to leverage government power.

I would absolutely agree – with Friedman, with Rick and with the authors of the book,
that so long as any special interest has the ability to strongly influence a powerful government the opportunities for success for most people will decline.

The disagreement is on the real root cause, and the remedy.
When you are crushed by a boulder, is it the size of the lever used to push that boulder over the cliff or the size of the boulder itself that is the cause of your demise.
There will ALWAYS be efforts to bend whatever power government has to the service of special interests. Both the extent and the effect will be driven by the amount of power that government has, not the power of the special interest itself.
Rick focuses on the rich and corporations as the powerful special interest he fears.
But ANY powerful special interest is dangerous – there are numerous instances were powerful lobbies for one noble cause have removed resources from other equally good causes, An interest does not have to be greedy or evil, it does not even have to seek a bad end to achieve one. No matter how wealthy we are if we devote all our resources at a single cause – even a good one – we starve. Government is not, should not be, and actually can not be structured, to weigh each of our trillions of competing needs and desires. It is structurally unable to manage that kind of complexity – absent circumstances such as war in which a single (or very few) priorities take absolute precedence over everything else.

Even the majority is a tyrannous special interest. No true democracy has ever survived long. Democratically structured governments fail, in direct proportion to the extent they embrace democracy.

The essential ingredients to a nations success are always sacrificed when any special interest controls government power.

These are the people that the big corporation, and the wealthy that you are so afraid of must kowtow to.
The direct cost to taxpayers of just the Washington DC portion of the cult of regulation has been about $600B since 9/11. That does not include the cost of government employees and contractors outside the DC area. It does not include the costs of the even larger number of similar people directly employed by the business attempting to steer or protect themselves from this regulation – all of which gets passed on to you in higher prices. It does not included the increased cost of production necessary to comply with these rules. And largest of all it does not include the innovation and ideas that just do not happen because of these rules, or because of the uncertainty caused by government.

Even wall street arguably adds value. There is no value add from Washington.

i have no doubt that most of the people depicted int he time article are decent people.
But are these the people you wish to have making complex business, technical and scientific decisions that will effect all of our futures ?
You do not trust business – fine, i get that. But when a business makes a mistake and causes me harm, I can sue them. I can punish them, and if the mistake is egregiousness enough someone may go to jail. Government pays no consequence for its decisions. CEI’s $1.7T figure for the cost of regulation is bogus – because much of the harm we can not know and can not possibly measure.

And this is just Washington. We have not covered the costs of state or local government.

I have trouble grasping how it is that you believe rich people are going to cause you harm.
Far too much of that argument rests on the ludicrous presumption that wealth is a zero sum game. That anything someone else gets is at your expense.

I do not need to fear the possibility of government storm troopers bursting through my door with automatics weapons, a real but very unlikely possibility, to know that the greater the power of government the less freedom and wealth I will have – the worse my life will be.
That is precisely what all those myriads of studies I have given you that correlate government spending with a reduction in GDP.

The total cost of government at all levels is approaching 50% of GDP – in some states it exceeds it. The most liberal estimate of optimal government size is about 23%. For each additional 10% we lose 1% of GDP/year. For our government that is 2.5% of GDP/year.

Obama would be win every single state if GDP were growing by 4.5% right now.
An additional 2.5% doubles our standard of living every 30 years.
Even if that means the uber rich are 4, 5 even 100 times richer, it still means the rest of us are twice as wealthy.
Let us just assume that regular recessions are a natural consequence of free markets – rather than the far more likely case that they are the result of government incentives causing the misallocation of resources or worse still credit.

Would you be willing to accept a financial system that every few decades cost you 30% of all your investments (and recovered them in a few years) if everyones standard of living doubled every 30 years ? That is doubling independent of the natural improvement in your standard of living as your grow older.

It is probably impossible to actually have a stable system with little risk. Right now we are experiencing what a low growth low risk economy feels like – and it is very unstable.
The less risks that are taken the less growth there is and the less it takes to destroy what little growth we have.

During the 90’s, We had a russion economic collapse, a south american collapse, a Mexican collapse, and asian collapse – and the US economy did not even hiccup.
Greece is facing a collapse that is smaller than that of Russia in the 90’s and just the fear of that has thrown Europe back into recession and threatens the US. At even 3% growth problems elsewhere in the world would roll off our shoulders.

Dave: The emperor of Austria once had the nerve to criticize a work of Mozart by telling him that his piece had “too many notes.” Well, I’ll have to play the emperor’s role here and say,
“Too many words.” I’d like to be able to engage you, but I can’t possibly read through a dozen consecutive lengthy posts and do them justice. I’d have to take notes, and I just don’t have enough time. For now, let me just refer you to my brief reply to Priscilla’s comment, which pretty much sums up my attitude toward capitalism.

Now I have to get on with my next column, which is way overdue. See you in a bit.

“Yep, there are more chances that god will kick a fat cat ass to give to charities than to kick a secularist statist ass who wants to redistribute god given wealth.

However, why a fat cat should be charitable? It would feed and multiply only the lazy asses. Give the poor more books about Adam Smith until they learn about unlimited wealth.”

valdo, I assume that was you? I fdecided to respond down here at the bottom, otherwise WordPress would only give me a column of an inch orr two……

Well, God is generally held responsible for the birds and the bees, the flowers and the trees, etc. And even war and famine and pestilence, by some. But this is the first that I have heard that wealth, at least of the cold hard cash variety, is god-given. 😉

But, at least you seem to agree that charity is not likely to emerge from the IRS. I assume that you would agree that there are grateful fat cats who willingly share their wealth with those less fortunate. And that it just might be a good idea for society to revere and respect these folks, as opposed to revile them for having acquired great wealth in the first place, and advocating the confiscation of said wealth, to be distributed to various campaign bundlers, union supporters, interest groups, and worthless programs.

I think that the US government very clearly has a role in providing safety nets for the very poor and helpless. And I am willing to concede that the government should encourage the arts, although not to the tune of billions of grant money paid to already thriving organizations. But to feed and multiply the lazy asses? Not so much.

Usually when the rich make charitable acts they do as tax deductible. I know “charities” given to hospitals where only the ones with a lot of money afford to get medical attention.

Anyway, the rich get god-given wealth and when they are charitable is because they hope to get in the paradise after they die.

God loves the rich, for god is giving richness to those who love him. The rich need the poor, for if there are no poor there are no rich and vice versa…
We have to be content on how god arranged everything. Amen!

Scientists at the University of California at Berkeley analyzed a person’s rank in society (measured by wealth, occupational prestige and education) and found that those who were richer were more likely to cheat, lie and break the law than those who were poorer.

“We found that it is much more prevalent for people in the higher ranks of society to see greed and self-interest … as good pursuits,” said Paul Piff, lead author of the study and a doctoral candidate at Berkeley. “This resonates with a lot of current events these days.”

Rich people get everything because American Jesus-God only loves the 1%. The rest of you can rot in Hell

Whoever you quoted has defined self interest as evil to begin with.
Start with a logical contradiction and you can prove anything.

I have absolutely no doubt that the more successful see self interest as good. I would be hard pressed to find a single libertarian, and few conservatives or economists who do not grasp that it is not only good, but the primary driving force for the improvement of the world.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”
Adam Smith.

Do you really believe that Gates, Buffet, Oprah, became rich by lying, cheating and breaking the law ?

Who would do business with someone they believed was not honest ?

You may think you have low expectations when you go to McDonald’s but you did not go to burger king, the local diner, or pizza shop.
You ate at McDonald’s because you trusted – and had reason to, what you would get. By freely giving them your money in exchange for a happy meal you were trusting that they would give you something more valuable to you at that moment than your money. McDonald’s did not force you to buy their burger.

Every single time you buy anything from anyone you are demonstrating that you trust them.

And who do you trust ? You trust the people you buy from.
You trust that they value their self-interest enough to give you what you want in return for what they want.

The root of all exchange is trust. Mr. Piff’s claimed research is bogus, because if it were true society could not function.

Of the three things that the uber-rich can do with their money.
1) pay it to the government is taxes,
2) give it to charity.
3) invest it.

The societal benefit of those choices is in the inverse order.
Excluding any investment benefit to themselves, the benefit to society of their investment will be greater than that of either charity or government spending.

I value charity. I engage in a great deal of it. But I primarily give my time and energy.
Because the economics of monetary giving are abysmal. There are insufficient incentives to spend the money well. Gates just blew a billion dollars trying to eradicate Malaria in Africa. The only benefit was learning that the WHO needs one of Valdiobade’s ass pacifiers, because they know squat about stopping the spread of malaria.
As bad as charities are at getting the greatest social benefit for the money they are given the incentives in government are even worse.

Fine, I am too verbose. I operate under the common libertarian delusion that people are basically rational and can and will change their minds when presented evidence.

I am also disappointed. It is reasonable to have faith where evidence does not exist.
I believe as even Socrates did that life does not begin at birth or end at death.
But I do not believe in fairy tales. I do not believe against the evidence of my own eyes. i do not believe just because someone others respect says so.

The entire world has improved greatly over my lifetime, it has done so dramatically. It has done so despite having improved very little for the first 150,000 years of human existence.
It has done so almost everywhere. But it has done so where individual freedom was greatest.

I need history and statistics to see that this improvement began slowly about the time of Marco Polo spread north through western Europe into Britain and the US.

But I only need my own eyes and my own life experience to know that throughout the world, throughout the US, and throughout my own town, everyone is living dramatically better than they did a decade, or a generation ago.

I can start spouting statistics about cars and refrigerators, and ….. But I knew the memes of the left were wrong before that – because whatever their emotional appeal, they neither fit human nature nor my own life experiences.

I grasp that my view of human nature, and my own life experiences are insufficiently broad to prove anything. But they are a starting point. An excellent reason to question claims that do not fit. Questioning frameworks that do not conform to the world I have seen has been eye opening. The facts, statistics, data are not only there, there always there and the story they tell is compelling.

You chose Scandinavia as a model. I honestly knew only a little, but I knew it would not hold up. None of this stuff does.

And your back again relying on credulous claims of greed and the evils of derivatives.
I can give you a thousand paragraphs on each, but why dont you get past me and start questioning your own premises ? Particularly when your view of the world and the world you actually live in collide.

valdobiade – here is comments by Piff on the methodology of his own study.

What he actually demonstrated is the non-rich people are more likely to behave unethically when they are pretending to be rich.

Piff: We did. We ran a study; in this case, we brought participants into the lab and temporarily induced them to experience sort of a higher or lower sense of social class by having them compare themselves to people at the top of the socioeconomic ladder, or compare themselves to people at the bottom of the socioeconomic ladder. About 15 minutes after that kind of, what we social-psychologists call a priming task, we had them enter the hallway where the experimenter told them to hold a jar of candy that was reserved for children participating in a study in a nearby lab. And we just kept track of how much participants took. Participants who we made feel higher in social class rank actually took two times as much candy from children.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”
Adam Smith.

There is a *huge* difference between what Adam Smith has “seen” and what is happening in nowadays capitAlism. Butcher, brewer or backer are part of serving our natural cycle and if the only interest of the butcher, the brewer and the baker is to make as much profit possible then they are demented. For they will try to kill each other business, that’s why you have negative advertising thrown against each corporations, not that they have a better services, but they have the possibility to brainwash you that their services/products are better.

Sometime you can see corporations selling crap, but they have a “better” access to spread commercials, or to lower their prices until their competitors get bankrupt then rise the price again. The last method is possible to be done from “un-consumable” wealth you were talking about, the monopolistic corporation survive from profit made by ridiculous high prices, like oil corporations are doing. When there is competition from alternate energy investors, the price of gasoline plunges to see that it is “better” to have a guzzler than an electric car. Yes, electric cars in the crowded American cities would kill a lot of profits from monopolistic oil corporations.

Now, let’s see another difference between Adam Smith “vision” of butchers, bakers and brewers, and nowadays capitAlism: Let’s say that “ACE Medical Corporation” “discovers” that a kind of rubber pacifier made by them, inserted in the anus will prevent the forming of hemorrhoids. Millions of people suffer from hemorrhoids and will be happy to try the device. Gates, Buffet, Oprah, will buy millions in stock from “ACE Medical Corporation”, so will do other millions of people.
Now, after they sold millions of ass-pacifiers, it is discovered that when you fart, the device makes an unpleasant “pop”. Gates, Buffet and Oprah have a better possibility to find out that the stocks will go down, so they sell the stocks and get the profit, while other millions who bought stocks are the losers. By producing and selling the pacifier the GDP has increased, but in the end the pacifier is useless, only that it was a method to steal money.

Yes, Gates, Buffet, and Oprah (as an example of rich evil people) are thieves. Indeed there are not laws that they broke, nonetheless they are evil.

Any differences between then and now favor the consumer.
Producers increasingly have to compete worldwide, Consumers have far more choices. And this trend continues.

Negative advertising is almost exclusively a political phenomenon. While it works – negative advertising harms both the advertiser and their target – though the latter more. That can be effective in a political contest where there are only two choices but it is very ineffective in a broad marketplace.

Further your claims about negative advertising are inconsistent with your claims regarding the honesty of big business.

If reputation does not matter to big business then there is little reason to build and defend a brand, and no reason to engage in or worry about negative advertising.

Reputation matters. Just as we make choices on eBay based on reputation, we do the same with respect to our business dealings.
People do not exchange with people they do not trust.
Since you can not get rich without engaging in commerce, if you are dishonest people will find out and they will refuse to deal with you.
And in the modern era this is even more true. Today we can go to the internet and find out anything we want about the reputation of any business or person. And we increasingly do.

Please cite a real world example where a business has lowered prices to knock out the competition and then raised them later.
There are no successful monopolies that are not literally in bed with government.

I do not want to start an entirely new topic on electric vs. gasoline cars. I would just note that there are myriads of excellent economic reasons that electric cars are not ready for broad use yet – and may not be for some time. One of the biggest being energy density. When you can store the equivalent energy of a gallon of Gasoline in the same or less space and weight, you will have a viable competitor. The Government Motors Volt is demonstrating myriads of other ones. GM damn near bet the company on the Volt. And the government subsidized it to the tune of almost $10,000/vehicle. Gasoline prices would have to be something like 6 times as high for it to make economic sense. Do you beleive the oil companies paid GM to make a crappy car ? Do you beleive they artificially lowered prices by a factor of 6 to make the volt uneconomical ?
The long term inflation adjusted price of gasoline in the US has been the same or declining since the 70’s.
Gasoline must compete with far more than electricity. It is being replaced in Buses, and will likely be replaced in trucks, by natural gas – because at current prices it is 1/2 the cost per mile of Gasoline (It still has a lower energy density and less robust distribution system – problems for cars, but far less for busses and trucks.

The US has the lowest energy costs in the world – which is one reason why alot of manufacturing is moving BACK to the US.

I have no idea what your point is regarding “ass pacifiers”.
I would be happy to discuss things that have actually happened.

So in the end your claim is that the “rich” are evil, greedy, criminals because they are “rich”.

I place a substantial value on the arts. My degree is in Architecture – buildings not computers.

But the only place government has in the arts, is paying for the decoration of public buildings.

Art will do fine without government patronage. It will be free to express itself as it choses. There will be no more debates over whether Annie Sprinkle or Andre Cerano works are actually art.

If you personally value art – make your own contributions, or buy what you like.

Current government contributions to the arts are negligable anyway. The NEA got just slightly more than the cost of “the scream” this year.

As to the safety net, while there is compelling evidence that on the whole it does more harm than good, even if we accept the premise that a safety net is desireable – we would be hard pressed to do worse than we have. The income threshold for poverty (22,000/year) in the US is just a little below the median standard of living in Sweden.
There are 115M households in the US. The poverty rate is purportedly 15%, that is 17.25M households. If we assume every one of those has zero income – more likely they are clustered closer to 22,000/year. The Federal government could guarantee every household in poverty a $22,000/year income for just under $380B/year.
That is slightly more than we are spending on interest. It is just a teensy bit more than we spend on medicaid/year (not medicare). It is half what we spend on social security. and more than half what we spend on defense. Food stamps alone are nearly half that amount.

I will oppose just about any safety net scheme you can come up with, for myriads of reasons – such as creating a disincentive to work and being incompatible with open immigration.

But here is and idea, cap all safetynet programs except Social Security and medicare at 2% of GDP, that will give you the approximately 320B that it would take to provide every family currently at or below the poverty level with an income of $22,000/year.
Using average house spending breakdowns that will allow you to afford the mortgage on a $100,000 house, a $15,000 car, Leave you $500/month for food, cloths and entertainment, and provide you health insurance covering all medical expenses beyond $10K/year.

Of course different “poor” families could chose to spend their money differently.

We can “solve” the social security and medicare problems similarly.
just establish that neither social security nor medicare can spend more than they take in each year – I will even throw you a bone, and allow them to cash in their IOUs, even though we really can not afford that.
The government is then free to make up the difference by either:
Increasing social security and medicare taxes, decreasing benefits, or decreasing eligibility. What the government can not do, is increase other taxes to cover social security and medicare shortfalls. Medicare Part D alone is running $90B/year or 1/4 of the cost of a guaranteed $22,000 income to the poor.

Currently Social Security, Medicare and the safetynet are over 50% of the federal budget. Social Security and Medicare alone are nearly 10% of GDP – almost $1.5T/year. There are just shy of 40M SS/Medicare recipients over 65, in theory they should be receiving just shy of $40,000/year.

The truth is that all the social safety net spending – about 55% of the budget, costs almost $18000/year for each family in the US – and only households in the top 10% are paying that much taxes/year.

Like it or not when you tax capitol or investment, while you may appear to be taxing the rich, you end up paying those taxes in higher prices for goods and services.

So one way or another the social safety net is costing your family more than $18,000/year. For reference defense is costing you another $6000/year/family

asmith wrote: “Please cite a real world example where a business has lowered prices to knock out the competition and then raised them later.
There are no successful monopolies that are not literally in bed with government. ”

Nobody denies that capitAlism uses also predatory pricing, the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors.

However, all your answers are typical: Is something wrong with capitAlism? Then it is the government fault… always…

I completely forgot that I myself have an example for Dave. In the 90s the SF Bay Area’s largest department store chains suddenly started carrying big-and-tall fashions at very low prices. I know, because at the time I was morbidly obese and couldn’t wear anything else. Prior to this, I had purchased my clothing at two regional chains of big-and-tall stores: Bert’s and Rochester. Within a year, Bert’s was out of business and Rochester had closed almost all of its stores, and would later consolidate into a different chain. Once this happened, the major retailers not only raised prices, they stopped carrying the larger sizes and liquidated their big-and-tall lines of clothing.

At the time I was just stunned, but now I realize this is just business as usual in retail. So there you have it Dave – your real world example.

First let’s presume this is all correct – this is the best example you can come up with ? What no Standard Oil ? No microsoft ? No Apple ?

This is the worst evil of capitalism that demands tightly regulating the entire system lest someone charge more than you would like for Big & Tall clothes ?

But lets dig deeper into Big & Tall clothes and see if you are correct and some producer was able to create a real sustainable monopoly absent government.

Perry Ellis is offering Men’s blazers of $99. While big and tall men’s blazer’s are $99.

JosBank’s is offering Mens Big and Tall wool suits for $595.
In 1970 I was paying atleast that much for a size 38 suit, and much more for a 38 Perry Ellis jacket.

Even if you are correct that your local department store successfully put the local big & tall store out of business and then raised prices – clearly they did not stay that way long as current big & Tall prices are lower than I paid for regular suits in the 70’s – and that is without any adjustment for inflation.

My argument is not that participants in the free market will not seek advantage. My argument is that the business tactics you are so afraid of and demand to see regulated, are not sustainable. And absent government intrusion into the Big & Tall men’s clothing market, the “predatory pricing” you are so upset about – is still unsustainable.

Even accepting that a business might successfully drive out its competition and be able to raise prices, the more egregiously they do so, the greater the profits they make the more certainly they draw more competition that will drag the prices back down.

In the process, substantial wealth is created, and just to be clear, the wealth is not the money you pay for “Big & Tall” suits, but the suits themselves.

Name anything that is mostly outside the purview of government regulation that costs more today than it did two, three decades ago. Such things do exist, but they are the exception not the norm. In a substantial number of cases products are cheaper even without adjusting for inflation.

This is the kind of free market predation that you are terrified of?

Conversely you would be hard pressed to find a highly regulated good or service that is not more expensive today by most all measures.

Even that most notorious of products gasoline, has about the same inflation adjusted retail price today as it did in 1979. In fact since 1918 the inflation adjusted price of gasoline has rarely been more than $3.00/gal and less than $2.00/gal.
And oil company profits average a bit over 9% and tend to peak arround 11% when prices spike, both of which are low by business standards.

When exxon sells a gallon of gas it makes less money than government collects in excise taxes (essentially sales taxes), and those taxes do not include the myriads of other taxes paid by exxon.